As reported by The Economic Times, NRIs are increasingly diversifying beyond traditional investment avenues such as real estate, bank deposits, direct equities and mutual funds. Private credit, REITs, InvITs and PMS are gaining significant interest for their potential to provide differentiated return streams and contractual cash flows. According to Sumegh Bhatia, MD & CEO – India and Global Indian at Lighthouse Canton, these products offer exposure to India's growth story while complementing equity portfolios effectively. The discussion is moving beyond conventional investing corridors, with keen interest in understanding the entire opportunity set including institutional-quality offerings that provide differentiated return streams.
As reported by The Economic Times, GIFT City is becoming increasingly tax-efficient for NRIs with qualifying IFSC structures offering exemptions on specified securities income and capital gains. The framework supports both retail and non-retail schemes, venture-capital structures and PMS. As of March 2026, GIFT-IFSC had 1,147 IFSCA registrations/authorisations and more than US$39 billion of cumulative commitments raised by funds. The current IFSCA framework specifically accommodates fund-of-funds structures and non-retail schemes can pursue complex trading and derivatives strategies. As per The Economic Times, GIFT City is increasingly becoming a tax-efficient gateway to India, rather than simply another chosen domicile, with the investment avenues and universe expanding to include Indian equities, India-focused equity fund-of-funds, venture and private equity landscape, hedge fund offerings, private credit and other alternatives.
According to The Economic Times, NRIs must consider NRE and NRO accounts based on source of funds, taxation, repatriability, and holding conditions. An NRE account offers tax-free interest and full repatriation for foreign earnings, while an NRO account manages income earned inside India with taxable interest and restricted repatriation up to USD 1 million per financial year. The rupee hitting 96 per USD has created mixed sentiment, with remittances becoming attractive while financial assets face conversion challenges. As reported by The Economic Times, NRIs face multiple challenges with mutual fund investments due to complex KYC regulations (FATCA/CRS), NRE/NRO account restrictions, TDS taxation, limited platform support, and operational inefficiencies.
As reported by The Economic Times, India's formalisation of credit and middle-market economy expansion are creating deeper opportunities in private credit. Private credit can complement equity exposure by providing contractual cash flows rather than relying purely on capital appreciation. REITs and InvITs should benefit as investors seek income-generating exposure to India's commercial real estate and infrastructure without operational complexity. The exuberant primary market has led to widespread exploration of private market landscape with keen interest in mid to late-stage pre-IPO opportunities. According to The Economic Times, PMS and uncorrelated opportunities within pure play long/short and market neutral strategies continue to be favoured as differentiated plays against traditional choices. These discussions have gathered further momentum given the prolonged time and price correction of Indian equities in the listed space.
According to The Economic Times, while the financial assets and investment basket have expanded significantly for NRIs, frictionless lending against domestic assets and leveraged investment products tied to India face are areas requiring consideration. The general mood among NRIs is cautiously opportunistic, with Indian equities remaining the core of their India financial allocation. GIFT City continues to bridge the gap between global Indian wealth and India's capital markets, providing holistic access to a larger part of India's investing avenues without associated complexities. As reported by The Economic Times, it's the long-term conversion friction that essentially becomes a talking point, but Indian equities remain compelling over the long term given structural growth drivers including rising consumption, formalisation, manufacturing, financialisation and increasing corporate profitability.
