GIFT City, located in Gandhinagar, has emerged as a new route for Indian investors to access global investment opportunities without leaving India. According to Jay Kothari, GIFT City was originally designed as India's answer to global financial hubs such as Singapore and Mauritius. The facility allows Indian asset managers and investors to access international investment products through a unified regulatory framework overseen by the International Financial Services Centres Authority, or IFSCA. As reported by NDTV Profit, the process for investing through GIFT City is designed to be similar to investing in mutual funds, with retail investors able to invest either directly or through financial advisors by completing digital onboarding, transferring funds and receiving units in global investment products.
The investments operate under the Reserve Bank of India's Liberalised Remittance Scheme, or LRS, which allows individuals to remit up to $250,000 annually overseas. For a family of four, that effectively creates a combined investment capacity of nearly $1 million per year. According to Kothari, minimum investment requirements vary depending on the structure, with Alternative Investment Funds (AIFs) operating through GIFT City requiring investments of at least $150,000, while retail-oriented global products can have much lower entry thresholds, with some retail offerings beginning at around $5,000.
The growing interest in global investing comes as Indian investors seek geographical diversification beyond domestic equities. As reported by NDTV Profit, Kothari highlighted that India represents only 3% of the global market cap, leaving 97% of opportunity that Indian investors are not exposed to. He pointed to the past two years as an example, when several global markets including the US, Taiwan, China and Korea outperformed Indian equities during certain periods. The Kospi has seen a surge of nearly 200% in one year, while Nifty is down around 5% in the same time period. GIFT City-based funds can invest across global stocks, exchange-traded funds and international mutual fund structures, depending on the strategy.
Kothari cautioned that global investing also introduces additional risks, including currency fluctuations, geopolitical developments and tax implications. For Indian residents investing through these structures, gains are taxed differently depending on the holding period, with long-term capital gains treatment generally applying after two years. According to NDTV Profit, while GIFT City simplifies operational access to global markets, investors should still understand the underlying products and ideally seek professional financial advice before allocating money overseas. Kothari concluded that the world is their stage, allowing investors to invest wherever they are most comfortable with.
