How Much Allocation to GIFT City Is Sensible for NRIs?

A question we hear almost daily from NRIs in our Belong community: "GIFT City sounds great, but how much should I actually put there?"

The confusion is understandable. Most financial advice throws around vague suggestions like "diversify" without giving you a number.

You're earning in dirhams or pounds, your family is in India, and you're not sure if putting 10% or 50% in GIFT City makes sense for your situation.

Here's what we've learned after advising hundreds of NRIs: the right allocation depends on three things.

Your timeline for returning to India. Your comfort with currency risk. And your existing exposure to Indian assets.

Let's break this down with actual percentages you can use.

Why GIFT City Needs a Separate Allocation Conversation

GIFT City isn't like other Indian investments. When you invest in NRE fixed deposits or Indian mutual funds, you convert your foreign currency to rupees.

Your returns depend on both investment performance and rupee movement.

GIFT City investments work differently. You invest in USD or other foreign currencies. Your principal stays protected from rupee depreciation. And thanks to IFSCA regulations, you get tax benefits that mainland India investments don't offer.

This creates a unique portfolio role. GIFT City acts as a bridge between your foreign savings and India exposure.

👉 Tip: Don't compare GIFT City to your regular NRE FD. Think of it as a separate bucket that protects your foreign currency while giving you India-linked opportunities.

The Allocation Framework by Investor Profile

After analyzing portfolio data from our users, we've developed a practical framework. These aren't rigid rules. They're starting points you can adjust.

Investor Profile	Suggested GIFT City Allocation	Why This Range
Planning to return in 2-5 years	10-20%	Building India base without over-committing
Staying abroad 10+ years	20-35%	Currency hedge while capturing India growth
Retiring to India soon	15-25%	Balance between safety and rupee exposure
High-risk tolerance	25-40%	Can include AIFs and equity funds
Conservative investor	10-20%	Focus on USD FDs, avoid equity

These percentages refer to your overall investment portfolio. Not your total net worth including real estate.

Start with Your Return-to-India Timeline

Your timeline changes everything. An NRI planning to move back to Chennai in three years needs a different approach than someone settling permanently in Dubai.

Returning within 5 years: Your priority is building a landing pad. You'll need rupees soon. Keeping 10-20% in GIFT City makes sense. This gives you USD protection without blocking too much capital from rupee assets you'll actually use.

Staying abroad indefinitely: You can afford longer-term GIFT City exposure. The 20-35% range works well. USD-denominated mutual funds and FDs protect purchasing power while giving India market access. Explore options through our GIFT City mutual funds tool.

👉 Tip: Review your allocation whenever your return plans change. A job loss or family situation can shift your timeline overnight.

Factor in Your Existing India Exposure

Many NRIs already have significant India exposure without realizing it. Count everything: your parents' home where you'll inherit a share, existing NRE FDs, mutual fund SIPs, ancestral property, even that plot you bought years ago.

If you already have 50% of your net worth in Indian assets, adding aggressive GIFT City allocation creates concentration risk. In this case, stay closer to 10-15%.

If your India exposure is below 20%, you have room for a larger GIFT City allocation. This is common for NRIs who've lived abroad for 15+ years and invested primarily in their resident country.

Use our NRI FD rates comparison tool to understand how your existing FDs compare with GIFT City options.

What the Research Says About Geographic Diversification

Financial literature consistently recommends 10-30% allocation to emerging markets for developed-country investors. India, as the fastest-growing major economy, deserves attention within that allocation.

For NRIs, this calculation gets personal. You have emotional and practical ties to India that pure foreign investors don't.

Your diversification decision isn't just about portfolio theory. It's about where you might live, where your family is, and where your retirement might happen.

The sensible approach: if you treat GIFT City as your primary India allocation vehicle, the 15-30% range aligns with both academic research and practical NRI needs.

Allocation by Product Type Within GIFT City

Not all GIFT City products carry the same risk. A USD fixed deposit at an IFSCA-licensed bank is fundamentally different from an equity AIF.

Conservative allocation within GIFT City: Split your GIFT City portion with 70% in USD FDs and 30% in debt-oriented funds.

Moderate allocation: Use 50% in FDs, 30% in hybrid mutual funds, and 20% in equity funds.

Aggressive allocation: Consider 40% equity funds, 30% FDs for stability, and up to 30% in Alternative Investment Funds. Note that AIFs require minimum $150,000 and suit only high-net-worth investors.

Track market movements using the GIFT Nifty tool before making equity allocation decisions.

👉 Tip: Your allocation within GIFT City should match your overall risk profile. Being aggressive in GIFT City while conservative elsewhere defeats the diversification purpose.

Common Allocation Mistakes We See

Mistake 1: All or nothing thinking. Some NRIs put zero in GIFT City because they "don't understand it." Others put 60%+ after reading one positive article. Both extremes create problems.

The first leaves currency risk unmanaged. The second creates India concentration.

Mistake 2: Ignoring liquidity needs. GIFT City FDs have lock-in periods. AIFs have 3-5 year commitments. Allocating emergency funds or short-term savings here is a common NRI investment mistake.

Mistake 3: Not reviewing annually. Your life circumstances change. Your allocation should too. Build annual reviews into your financial calendar.

A Practical Starting Point

If you're unsure where to begin, here's a simple approach we recommend:

Step 1: Calculate your total investable portfolio excluding real estate.

Step 2: Determine your existing India exposure as a percentage.

Step 3: If India exposure is below 25%, consider 20-25% GIFT City allocation. If above 35%, stay at 10-15%.

Step 4: Within GIFT City, start with USD FDs for the first 6 months. Add mutual funds once you're comfortable with the platform.

Step 5: Review every 12 months or when major life changes occur.

This isn't personalized advice. Your situation might need adjustments. But it gives you a structured starting point rather than guessing.

👉 Tip: Document your allocation rationale. Write down why you chose your percentages. This prevents emotional decisions during market volatility.

What Makes GIFT City Allocation Different from Regular India Investing

The 5-layer investment framework we recommend places GIFT City in a unique position. It offers India growth potential with foreign currency protection. This combination exists nowhere else.

Regular NRE accounts force rupee conversion. International mutual funds lack India exposure. GIFT City bridges both worlds.

For retirement planning, this matters significantly. If you retire to India, you'll need rupees. But until then, protecting your purchasing power in your earning currency makes sense. A 20-25% GIFT City allocation achieves this balance.