Located on the banks of the Sabarmati River, between Ahmedabad and Gandhinagar, GIFT City is an off-shore special economic zone in India. It is the first operational smart city in India, with regulations that not only entice businesses and employees but also global investors. 

Investment opportunities in GIFT City

  • Listing of Indian companies: Everyone wants a share in the growth story of the Indian economy. However, this aspiration was limited to just resident Indians as NRIs and global participants were restricted from engaging with Indian exchanges. With GIFT City and the new IFSCA regulations, Indian companies will now be directly listed on IFSC stock exchanges. Although the process is still underway, global participants will now have access to primary markets.
  • Real estate market: GIFT City owes its title as the first smart city in India to the well-planned infrastructure and modern-day amenities that embellish it. This in turn has led to the rapid development of the real estate market in GIFT City. Global investors can also buy into this through the purchase of REIT units. 
  • Offshore banking and global equities: The IFSCA regulations have provided a convenient framework for offshore banking. The high interest rate, relaxed repatriation rules, and option for premature withdrawal of deposits is making it a popular hub to park money in fixed securities. Further, zero securities transaction tax and zero commodity transaction tax have made it an alternative for investors to engage with international exchanges without an NRO or NRE account.
  • Fintech startups: GIFT City is an attractive area for the new-age fintech companies. Access to international markets, tech-driven growth, and friendly compliance add to the ease of building in this space. The 2025 budget has also extended the deadline for businesses to commence operations in GIFT City until March 2030 to qualify for tax benefits.

Explore exciting Gift City career opportunities in finance, tech, and more.

Benefits of investing in GIFT City

  • User-friendly regulations: The regulations have been designed to attract foreign investments. For this reason, the onboarding & transfer processes have been simplified and investments have been deemed tax-free in India. 
  • Repatriability: Investments made in GIFT City are fully repatriable. There is no need for an NRO or NRE account. Hence, every investment will be returned to the foreign account from which it was credited. 
  • Strategic location: Given the proximity to Ahmedabad and Gandhinagar, excellent connectivity, and modern-day amenities, REITs based in GIFT City have the ideal environment for strong growth.
  • Growing financial hub: As of December 2024, over 740 entities have registered in GIFT City, with banking assets exceeding $78 billion. By 2030, the insurance sector is also projected to grow 15x. 
  • Union budget incentives: The 2025 budget has provided GST exemptions to new GIFT City services catering to offshore clients. A tax-free status has been extended to offshore funds and ETFs that relocate to GIFT City.

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Key GIFT City investment products for NRIs 

Product

Key Features

Tax Benefits

Global Equities & Bonds

Access to international markets via IFSC exchanges

Gains from transfers not taxed in India

Offshore Banking & Deposits

Foreign currency deposits with competitive interest rates

Interest income exempt from tax

Direct Listings

Invest in Indian companies listed directly on IFSC exchanges

Lower capital gains tax

Mutual Funds & ETFs

Relocated funds from offshore hubs like Mauritius and Singapore

Tax exemptions on income transfers

Alternative Investment Funds (AIFs)

Exposure to equities, debt, private equity, real estate, venture capital

Tax-exempt income if accrued abroad

Real Estate Investment Trusts (REITs)

Direct exposure to Indian real estate at lower costs

Dividend income taxed at 10%

Risks of investing in GIFT City

  • Evolving landscape

    The growth of GIFT City hinges on the expansion of products offered and marketing of the same. Investments are gladly welcomed, however,  the limited liquidity is a concern at the time of repatriation.

  • Investor awareness

    Unlike the global financial hubs in Singapore and Dubai, there is limited knowledge about GIFT City. Hence, attracting investments implies starting from square one of educating investors about GIFT City.

  • Regulatory ambiguities

    As GIFT City is a relatively new finance hub, investors and services are either unaware or skeptical of the long-term regulations. This has prolonged the setting up of services in turn deterring investments. 

  • Coordination with onshore regulators

    Although GIFT City comes under the jurisdiction of IFSCA, there are still some overlapping functions with RBI.  

Tax benefits of investing in GIFT City for NRIs

Tax
Exemption

Transaction tax

No Securities Transaction Tax (STT), Commodities Transaction Tax (CTT), or stamp duty

Capital gains

Taxed at 9% for companies (vs. 20%-30% in mainland India)

Dividend tax

Taxed at 10% for companies (vs. 20% in mainland India)

GST

Not applicable on services provided to offshore clients or between IFSC units

Transactions on IFSC exchanges are GST-free

Key considerations for NRI investors

  • Onboarding process: The onboarding process has been simplified to cater to the NRI audience. There is no need for an NRE/NRO account, saving investors a trip to India just to set this up. 
  • Repatriation: Not only are the investments made in GIFT City fully repatriable they are also completely tax-free in India. However, taxes may apply in the country where the funds are repatriated.
  • Diversification: GIFT City provides access to both global and shortly even domestic securities. This in turn ensures a more balanced and diversified portfolio. 
  • Regulatory landscape: There is continuous monitoring and revamping of the rules as GIFT City is still an evolving landscape. However, considering the global standard, the legal framework and operational efficiency are positioned for stable growth.

Why should NRIs invest in GIFT City?

  • Global gateway: Investments in the Indian securities markets involve complications specifically for NRIs. In such a scenario, this is an ideal gateway to international financial markets.
  • Tax efficiency: For NRIs looking at returning to India in the long run, the tax-free status on these investments in India, makes it an attractive option for maximizing returns.
  • Policy support: The government of India is actively promoting the development of GIFT City to compete on a global scale. For the same, they have granted favorable incentives as can be seen from the 2025 union budget.
  • Diverse investment options: GIFT City caters to the varied risk appetites and investment goals of individuals by providing various products ranging from derivatives and equity to REITs.
  • Growth potential: GIFT City is estimated to grow rapidly with sectors like banking assets already crossing $78 billion. Even the insurance sector is predicted to grow to 15x its current volume. 

Conclusion 

GIFT City is emerging as an attractive destination for international investors looking to invest in India. Global investors have the options to choose from a range of global equities and bonds, mutual funds, ETFs, AlFs, and REITs. Along with this simpler onboarding process, repatriation, diversification and favourable regulatory environment supporting the ease of investment for the investors.


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