But for many first-time investors, GIFT City remains unfamiliar territory. Who is it meant for? How does one begin? And what should investors evaluate before committing money?
Market experts say the biggest mistake is viewing GIFT City as an investment theme in itself.
Instead, they suggest treating it as another route to achieve specific financial goals, whether that’s global diversification, foreign currency exposure or building wealth over the long term.
GIFT City is a route, not an investment strategy
Experts say investors should first understand why they want to invest through GIFT City before exploring products or platforms.
According to Vishal Goraddia, Fund Manager, Aikyam India Discovery Fund, Aikyam Capital Group, a Mumbai-based, full-spectrum financial services and alternative asset management firm, GIFT City is most relevant for investors with cross-border financial needs. These include NRIs, globally mobile professionals, family offices and investors looking to access both India-linked and international investment opportunities through a regulated ecosystem.
Resident Indians can also invest through GIFT City under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), making it another avenue for international diversification.
Tanwir Alam, Founder and CEO of FINCART, an Indian virtual wealth management and financial planning platform, says investors use global investments to prepare for future foreign currency expenses such as overseas education, international travel or business expansion.
Holding overseas assets can also help diversify currency exposure over the long term.
Rather than replacing domestic investments, global assets should complement an India-focused portfolio, he says.
Start with your goal, not the product
One common misconception is that the first decision is choosing a platform. Experts disagree.
“The first question isn’t ‘Which platform?’ It’s ‘Which product solves your investment objective?'” says Ankur Choudhary, CEO and Co-Founder of Belong, a GIFT City-based retail investment app.
Someone looking to preserve capital may prefer foreign currency deposits, while investors seeking long-term growth may consider global equity funds.
Those with a higher risk appetite and larger investment corpus may explore products such as Alternative Investment Funds (AIFs) or portfolio management services (PMS).
The investment objective should determine the product, not the other way around.
Think globally, but invest patiently
Experts caution that global investing requires a different mindset from domestic investing.
International markets are influenced by different economic cycles, interest rates, currencies and geopolitical developments. As a result, returns may not move in line with Indian markets.
Alam believes investors should approach global equity investments with a long-term horizon of at least seven to ten years instead of expecting quick gains.
Goraddia also notes that GIFT City is better suited for medium- to long-term financial goals rather than short-term return expectations.
Choosing the right platform goes beyond fees
Once the investment objective is clear, investors should evaluate the intermediary carefully.
Experts recommend first verifying whether the broker, fund manager or investment platform is regulated by the International Financial Services Centres Authority (IFSCA).
Beyond regulatory approval, investors should compare the range of products available, account opening process, customer support, research capabilities, fees, minimum investment requirements and ease of fund transfers.
Goraddia says investors should focus on transparency and regulatory compliance instead of being influenced by tax-related marketing claims or promotional campaigns.
Understand the risks beyond market performance
Unlike domestic investing, overseas investments introduce additional factors that can affect returns.
Exchange rate movements may either enhance or reduce gains. Tax treatment can differ depending on the investor’s country of residence, while certain products may have lock-in periods or higher minimum investment thresholds.
Choudhary advises investors to evaluate post-tax and post-currency returns instead of relying only on advertised yields.
Alam adds that investors should also understand applicable tax rules, disclosure requirements for foreign assets and the impact of Double Taxation Avoidance Agreements (DTAAs), wherever relevant.
The paperwork has become simpler
Opening an investment account through GIFT City has become significantly easier in recent years, with many regulated platforms offering fully digital onboarding.
Typically, investors need identity and address proof, PAN, bank account details and, for NRIs, passport and overseas address proof. Depending on the product, additional documentation may be required.
Resident Indians generally invest under the RBI’s Liberalised Remittance Scheme, which currently permits outward remittances up to the prescribed annual limit, subject to FEMA regulations and applicable tax provisions.
Don’t skip the official sources
Before investing, experts recommend verifying information through regulators rather than relying on advertisements or social media.
The International Financial Services Centres Authority (IFSCA) maintains details of regulated entities operating in GIFT City. Resident Indians should also refer to RBI guidelines governing overseas remittances under LRS, while tax-related guidance is available through the Income Tax Department.
Investors should also read the offer documents and disclosures issued by the product provider before making any investment decision.
As Choudhary puts it, if claims around returns, tax benefits or regulation cannot be verified through official sources, they deserve closer scrutiny.
