A client in Dubai told us last month: "I want to invest in India but I'm tired of dealing with TDS, currency losses, and complicated repatriation rules. Is there a better way?"
My answer was simple: GIFT City.
Gujarat International Finance Tec-City is India's first International Financial Services Centre (IFSC). Think of it as India's answer to Singapore or Dubai's DIFC. The Foreign Exchange Management Act treats GIFT City as foreign territory for financial purposes. This changes everything for NRIs.
We have spent the last two years studying GIFT City products at Belong. What we found convinced us to build our entire platform around it. Here's what every NRI needs to know.
Why GIFT City Matters for NRIs
Traditional NRI investment in India comes with three headaches. First, you convert your hard-earned USD or AED to rupees. The rupee then depreciates 3-4% annually against the dollar. Second, you pay TDS on interest income. Third, repatriating money back is a paperwork nightmare.
GIFT City solves all three problems. The USD denomination of fixed deposits protects from INR depreciation. Your returns are tax-free in GIFT City. And GIFT City FDs are easily repatriable to your country of residence.
The numbers tell the story. Total banking assets in GIFT IFSC have surpassed $94 billion, while monthly trading turnover across its exchanges has exceeded $100 billion as of August 2025.
Investment Options Available in GIFT City
1. USD Fixed Deposits
This is the simplest entry point for NRIs. USD deposits offer 4.5%-6% annually, which is higher than typical rates in the U.S. Interest earned on GIFT City FDs is completely tax-free in India.
GIFT City FD can be created for amounts ranging from USD 500 to USD 10 million. Compare this to FCNR deposits which require minimum one-year tenure. GIFT City FDs start from just 3 months.
👉 Tip: Use Belong's NRI FD comparison tool to compare GIFT City FD rates with NRE, NRO and FCNR options across banks.
2. Alternative Investment Funds (AIFs)
GIFT City hosts over 200 AIFs as of mid-2025. These funds invest across private equity, real estate, infrastructure, and structured debt.
There are two types: Inbound funds invest in Indian equities. Outbound funds invest in foreign equities.The minimum investment for AIFs remains USD 150,000 per investor, making it accessible for high-net-worth NRIs seeking diversified exposure.
The tax treatment is remarkable. Category-3 AIFs that invest in Indian equity mutual funds are fully exempt from capital gains tax in India and are only taxable in the investor's country of residence.
For UAE-based NRIs, this means completely tax-free returns. Explore GIFT City AIFs on Belong.
3. Mutual Funds
GIFT City Mutual Funds are launched by Asset Management Companies operating within GIFT City and are regulated by IFSCA. These funds are exempt from Tax Deducted at Source (TDS).
The currency flexibility is a major advantage. GIFT City Funds are available in major international currencies like USD, GBP, SGD, and AED, making them more convenient for NRIs to invest without currency conversion hassles.
👉 Tip: Unlike mainland India mutual funds for NRIs, GIFT City funds don't restrict investors from US or Canada.
Also Read - Best Mutual Funds for NRIs to Invest in India
4. Global Equities and Bonds
For the first time, NRIs can trade international equities through GIFT City exchanges. Both NSE IFSC and BSE IFSC list global companies like Apple, Amazon, and Tesla.
This direct access eliminates the need for overseas brokerage accounts. You can trade both Indian and global stocks from one platform while staying compliant with FEMA guidelines.
Also Read -How to Invest in Bonds - Beginner's Guide for NRIs
5. Portfolio Management Services (PMS)
NRIs investing in GIFT City can explore PMS, a tailored investing option for those looking to invest in debt, stock, fixed income, and other securities through a designated fund manager.
PMS is ideal for HNIs who want professional management without the restrictions of mutual funds.
6. Insurance Products
Several Indian insurers now offer USD-denominated policies from GIFT City. For life insurance policies issued from GIFT City, full tax exemption applies on maturity proceeds when the premium doesn't exceed 10% of the sum assured.
This includes ULIPs and endowment plans with global investment exposure.
Tax Benefits: The Real Game-Changer
Here's why GIFT City changes the math for NRI investments:
Tax Type | Mainland India | GIFT City |
|---|---|---|
TDS on FD Interest | 30% for NRIs | 0% |
Capital Gains Tax | STCG: 15% (equities), 20-30% (others); LTCG: 12.5% | Exempt on many products |
STT | Applicable | Exempt |
Stamp Duty | Applicable | Exempt |
GST | Applicable | Exempt on financial services |
Dividend Tax | 20% | 10% |
Capital gains from IFSC-listed shares and derivatives are taxed at only 9%, considerably lower than the 20-30% rates that apply elsewhere in India.
For NRIs in zero-tax jurisdictions like UAE, these benefits multiply. Combined with India-UAE DTAA benefits, your effective tax rate on GIFT City investments approaches zero.
👉 Tip: Check your residential status before investing. Your NRI tax obligations depend on it.
How to Start Investing in GIFT City
Step 1: Verify Your Status
You need to be an NRI or OCI. Use our Residential Status Calculator to confirm.
Step 2: Complete KYC
Most GIFT City platforms offer digital KYC. Keep your passport, address proof, and PAN card ready.
Step 3: Choose Your Product
Start with USD FDs if you're new. They're simple, safe, and offer competitive returns. Graduate to AIFs or mutual funds as you get comfortable.
Step 4: Fund Your Account
Transfer funds from your NRE account or directly from abroad in foreign currency.
What About Risks?
No investment is risk-free. Here are the key considerations:
Many GIFT City investment options require a high entry threshold, which can limit access for smaller investors. Since investments and redemptions are made in foreign currencies, returns are subject to exchange rate fluctuations.
Also, GIFT City is relatively new. The ecosystem is growing but not yet as mature as Singapore or Dubai.
That said, the regulatory framework is robust. IFSCA oversees all operations, and major Indian banks like SBI, ICICI, and HDFC have established IBUs here.
My Recommendation
If you're an NRI in the UAE or any zero-tax country, GIFT City should be your first choice for India investments. The tax benefits alone can add 2-3% to your annual returns compared to traditional options.
At Belong, we've built our platform specifically to help NRIs access GIFT City products. Our USD Fixed Deposits offer up to 6% returns with complete tax exemption for UAE residents. We handle the paperwork. You enjoy the returns.
Start by comparing your options with our FD comparison tool. Join our WhatsApp community to connect with 2000+ NRIs who are already investing smarter. And when you're ready, download the Belong app to get started.
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