What Are GIFT City Funds?
GIFT City Funds are investment schemes based in GIFT City and regulated by the International Financial Services Centres Authority (IFSCA). These include global funds, mutual funds, AIFs, PMS, and insurance plans under a tax-efficient and globally compliant system. These funds are often USD-denominated, enabling investors to access Indian and international markets without facing currency conversion issues. They bring together Indian fund management expertise and global financial standards, allowing NRIs to invest smoothly with simplified regulations and favourable tax rules.
How Do GIFT City Funds Work?
GIFT City Funds operate under the regulatory framework of the International Financial Services Centres Authority (IFSCA), which aligns Indian financial regulations with global standards. This allows fund managers in GIFT City to launch international investment schemes without needing separate SEBI approvals.
NRIs can invest directly in these funds using foreign currency through their NRE or overseas bank accounts, eliminating the need for multiple currency conversions. The funds can invest in a mix of Indian equities, global ETFs, bonds, and hybrid portfolios, offering investors diversification and long-term capital growth opportunities.
Key Features of GIFT City Funds
GIFT City Funds have features that make investing simpler, safer, and globally accessible for NRIs.
- Global Investment Gateway: Enables NRIs to invest across Indian and international markets through a single regulated platform, ensuring easy global diversification.
- Foreign Currency Transactions: Allows investments in USD or other major currencies, removing frequent conversion losses and providing better transparency in fund valuation.
- Transparent Regulation: Operates under the International Financial Services Centres Authority (IFSCA), ensuring global compliance, investor protection, and operational transparency.
- Easy Repatriation: Facilitates smooth transfer of capital and returns abroad without restrictions, ensuring full repatriation flexibility for overseas investors.
- Digital Access: Offers paperless onboarding, remote KYC, and online management tools, enabling NRIs to invest and monitor portfolios from anywhere globally.
- Alternative Investment Funds (AIFs) and Mutual Funds: GIFT City hosts over 200 AIFs and several mutual funds as of mid-2025. These funds invest across private equity, real estate, infrastructure, and structured debt, offering investors diverse options suited to risk and return goals.
Compliance and Repatriation Rules for Insurance Proceeds
NRIs receiving insurance proceeds from policies in India or GIFT City must follow specific FEMA and RBI guidelines to repatriate their funds abroad. The key compliance and repatriation rules include:
- Regulatory Framework: Insurance proceeds for NRIs are governed by FEMA and RBI guidelines, ensuring all transfers comply with Indian foreign exchange laws.
- Legitimate Source Requirement: Proceeds can be repatriated only if they come from legally earned and fully taxed sources.
- NRE / FCNR Policies: If premiums were paid from NRE or FCNR accounts, or the policy is USD-denominated, proceeds can be freely repatriated without restrictions.
- NRO Account Limit: For payouts credited to an NRO account, repatriation is permitted up to USD 1 million per financial year, subject to tax compliance.
- Mandatory Documentation: NRIs must submit Form 15CA and Form 15CB along with proof of policy ownership, PAN, KYC, and tax receipts.
- Bank Verification: The authorised dealer bank verifies documents and ensures the transaction meets FEMA and RBI standards before approving repatriation.
Why do NRIs Prefer GIFT City for Insurance-Linked Investments?
Purchasing insurance through GIFT City offers NRIs and global investors flexibility, tax efficiency, and international investment access in USD.
- Invest and Receive in USD: Pay premiums and get policy payouts directly in US Dollars, avoiding currency conversion and exchange rate losses.
- Access to Global Funds: Access international funds and ETFs to grow your investment in line with global market opportunities.
- Cover Continuance Option: Your life cover stays active even if you miss payments, ensuring continued protection for your family.
- Financial Security: In case of your absence, your nominee receives a lump sum amount, providing financial support and stability.
- Flexible Withdrawals: After three years, you can withdraw part of your policy amount to meet urgent financial needs without losing full coverage.
- Customised Premium Options: Choose how often you pay premiums, and add riders or extra benefits based on your goals and lifestyle.
Insurance Opportunities for NRIs in GIFT City
GIFT City is not limited to capital markets. It is also emerging as a centre for innovative insurance solutions designed for global investors. With IFSCA’s approval for insurers to operate within the IFSC, many leading life and general insurance companies have introduced globally competitive products specifically crafted for NRIs and HNIs.
Insurance Companies Providing Services in GIFT City
Major insurance companies operating in GIFT City include:
- SBI Life Insurance Company Ltd
- HDFC Life Insurance Company Ltd
- Axis Max Life Insurance Co. Ltd
- ICICI Prudential Life Insurance Company Ltd
- Tata AIA Life Insurance Company Ltd
- Bajaj Life Insurance Limited
- Birla Sun Life Insurance Company Ltd
- Kotak Mahindra OM Life Insurance Ltd
- PNB MetLife India Insurance Company Limited
- Canara HSBC Life Insurance Company
- Pramerica Life Insurance Limited
- Bandhan Life Insurance Limited
- LIC India
Insurance Products Offered in GIFT City for NRIs
GIFT City insurers provide the following types of USD-based insurance and investment plans tailored for NRIs, HNIs, and global investors:
- Retirement & Savings Plans: These long-term USD plans help NRIs save for retirement with flexible premium payments, access to global funds, and easy transfer of money back overseas.
- ULIPs (Unit Linked Insurance Plans): USD-based ULIPs offer global investment opportunities and life insurance protection, helping investors grow their wealth in a tax-efficient international setup.
- Child Plans: Child Insurance Plans help secure a child’s future education or milestones while providing life cover, steady USD-based returns, and flexible withdrawal options.
- Pure Protection Plans: USD-based term insurance plans offer global life coverage with minimal paperwork and an easy claim process for policyholders living abroad.
Plans Provided in GIFT City by Different Insurers
Several leading insurers have launched innovative USD-denominated life insurance products in GIFT City, offering global investment opportunities and flexible protection for NRIs and HNIs.
HDFC Life Global Wealth Advantage Flexi
Key features of the HDFC Global Wealth Advantage Flexi plan include:
- USD-denominated unit-linked life plan focused on long-term global wealth creation.
- Diversified asset allocation and active fund management for balanced, risk-adjusted growth.
- Offers international coverage and flexibility for global investors.
IndiaFirst Wealth Wise Plan
Key features of the IndiaFirst Wealth Wise Plan include:
- Whole-life ULIP offers six international fund options for portfolio diversification.
- Designed for long-term wealth creation along with lifelong protection.
- Enables investors to benefit from both global and Indian market opportunities.
TATA AIA Global Invest
Key features of the TATA AIA Global Invest plan include:
- USD-based ULIP open to NRIs, OCIs, and PIOs seeking offshore investment options.
- Provides global market exposure and fully digital policy management.
- Allows partial withdrawals after three years to ensure liquidity when needed.
SUD Life International Wealth Creator
Key features of the SUD Life International Wealth Creator plan include:
- Dollar-denominated ULIP offering five curated global fund choices.
- Combines life cover with flexible premium terms and fund-switching features.
- Ideal for NRIs looking for global exposure with long-term financial security.
How Can NRIs Invest in GIFT City Funds?
NRIs can choose from multiple convenient ways to invest in GIFT City investment funds, depending on their preferences and banking arrangements:
- Set Clear Investment Goals: Decide your investment purpose, wealth creation, global exposure, diversification, or steady income, and fix a suitable investment amount, as many IFSC-based funds have higher minimum entry limits.
- Verify Your Eligibility Status: Confirm your NRI or OCI classification under Indian law. Check with your financial advisor for documents like a passport, PAN, and overseas residency proof.
- Select the Right Investment Option: Choose between mutual funds, AIFs, PMS, or exchange-linked products. Review their risk levels, cost structure, transparency, and redemption flexibility before committing.
- Open the Necessary Bank and Investment Accounts: Create foreign currency accounts such as FCNR or NRE through International Banking Units. Register with IFSC-authorised intermediaries for fund or brokerage access.
- Complete KYC and Documentation Formalities: Provide your ID, address proof, and documents showing NRI status as IFSCA requires. If you invest a large amount, you may need to complete additional verification and background checks.
- Transfer Funds Securely: Move your investment amount using authorised banking channels. If investing in USD or other foreign currencies, ensure compliance with FEMA and foreign exchange guidelines.
- Track and Repatriate Investments: Monitor your portfolio’s growth and maintain updated records. The IFSCA framework allows NRIs to repatriate returns smoothly while complying with home-country tax norms.
Jurisdictional Comparison for NRI Investors
The table below compares how NRI investments are treated across foreign jurisdictions, GIFT IFSC, and domestic Indian markets, highlighting differences in currency use, taxation, regulation, and repatriation flexibility:
| Parameter |
Foreign Jurisdictions (Outside India) |
GIFT IFSC (India) |
Domestic India (Regular NRI Investments) |
| Investor Category |
NRIs investing from overseas |
NRIs and OCIs investing through IFSC entities |
NRIs investing in onshore Indian markets |
| Currency of Investment |
Local foreign currencies (USD, GBP, AED, etc.) |
15 convertible foreign currencies (INR not permitted) |
INR-denominated investments only |
| Tax Treatment |
Subject to local country tax laws |
Special tax carve-outs under Indian law, exemptions on capital gains, no GST or STT |
Taxed under standard Indian rules with TDS, GST, and capital gains |
| Regulatory Authority |
Local financial regulator |
IFSCA, Unified Regulator for IFSC |
RBI, SEBI, IRDAI, and PFRDA under the domestic framework |
| Jurisdiction Type |
Non-resident jurisdiction |
Indian jurisdiction with international financial privileges |
Indian resident jurisdiction |
| Ease of Repatriation |
Freely repatriable under local norms |
Full repatriation permitted under IFSCA and FEMA rules |
Repatriation is subject to RBI limits and documentation requirements |
Tax Considerations of Investments in GIFT City for NRIs
One of the biggest reasons NRIs prefer GIFT City is its tax-friendly environment. GIFT City tax benefits offer several advantages that help investors save more and invest efficiently.
- Capital Gains Exemptions: NRIs' investments in GIFT City are exempt from capital gains tax, depending on the fund structure.
- Corporate Incentives: Companies and financial institutions in GIFT City get a 10-year tax holiday out of 15 years of operation.
- No Extra Transaction Taxes: Investors don’t have to pay Securities Transaction Tax (STT), Goods and Services Tax (GST), or stamp duty on trades made within the IFSC.
- Double Taxation Relief: NRIs can benefit from India’s Double Taxation Avoidance Agreements (DTAA), ensuring they aren’t taxed twice on the same income.
- Interest Income Exemption: Interest earned on non-residents' deposits in IFSC banking units is tax-free in India.
- No GST / Indirect Taxes: Financial services and trades in GIFT IFSC are exempt from GST, STT, stamp duty, and related transaction taxes.
Key Takeaways
GIFT City, also called India’s tax-free zone, allows NRIs to invest in multiple financial products through globally regulated funds, mutual funds, and insurance products. Its tax-efficient framework, USD-based transactions, and simplified compliance make it an attractive alternative to traditional investment routes. Investors benefit from zero GST and STT, tax holidays, and easy repatriation of funds. Among the many GIFT City benefits, NRIs also access innovative USD-denominated insurance plans that combine protection with global wealth creation.
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