What is Gift City Fund? How Can NRIs Invest in It?

The financial hub of India, the Gujarat International Finance Tech City, is India's first International Financial Services Centre (IFSC). Gift City Mutual Funds are among its key offerings that attract heightened interest from Non-Residential Indians (NRIs) as well. Mutual Funds operating within the GIFT City offer services under this mutual fund category and it can be a suitable investment option for NRIs too.

What is a GIFT City Fund?

GIFT City fund is an investment vehicle like a mutual fund, alternative investment fund (AIF), portfolio management scheme, etc. These services are mostly provided by AMCs set up inside India's IFSC at Gujarat International Finance Tec-City.

How To Invest in GIFT City Funds For NRIs?

NRIs can invest in GIFT City Funds like mutual funds via different tools and other investment options. The primary ways to invest in GIFT City Funds are through financial advisors, through AMCs, and via banks.
Benefits of Investment in GIFT City Funds

NRIs and Overseas Citizens of India (OCIs) can invest freely in GIFT City Funds. One of the key benefits of investment in GIFT City Funds is accessibility of global currency denomination. Gift City Funds allows investment in major international currencies like US Dollars (USD), British Pounds Sterling (GBP), Singapore Dollars (SGD), United Arab Emirates Dirhams (AED), and others. This eliminates the requirement of currency conversion for NRIs and OCIs.

GIFT City Funds are also exempt from Tax Deducted at Source (TDS) which helps improve in tax efficiency for NRIs. These funds operate under governance of IFSCA, which ensures compliance with global financial and regulatory norms. The funds allow exposure to international equities, bonds, and multi-asset portfolios.

GIFT City Funds Investment Risks

These instruments come with a criteria of high amount of money investment criteria. Most of the GIFT City Fund investment options come with a high entry threshold. It can be as high as $ 1,50,000. This can limit access for smaller investors. Exposure to global market volatility is another risk associated with GIFT City Funds. As these funds are often linked to international markets, they are directly influenced by global economic trends and events; hence, they can be more volatile. The returns earned on these funds are also subject to exchange rate fluctuations.

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