Something shifted in 2025. The conversations in our WhatsApp community changed. UK-based NRIs who'd been happily parking money in NRE FDs for years suddenly started asking about GIFT City.
The numbers confirm what I've been hearing. And the reasons go beyond just tax.
The Numbers Tell the Story
GIFT City's growth has been remarkable. As of September 2025, commitments raised have surged to $26.3 billion, with investments via GIFT City standing at $13.22 billion. The number of Fund Management Entities increased from 65 in March 2023 to 194 by September 2025.
The investor base has expanded to 4,733 investors. Among individual investors, NRIs and OCIs make up 57%-the largest segment.
This isn't gradual growth. NRI investments saw a 35-37% surge in just two months during mid-2024. That momentum has continued.
For UK NRIs specifically, I've watched interest spike dramatically since April 2025. The trigger? The abolition of the non-dom regime.
What Changed in April 2025
The UK's non-domicile tax system, which had protected foreign income for decades, ended on 6 April 2025.
Previously, UK NRIs could use the remittance basis-paying UK tax only on money brought into the country. Your NRE FD interest sitting in India? Untaxed in the UK as long as you didn't remit it.
That's gone now. All UK residents are taxed on worldwide income as it arises, regardless of where it sits.
The impact was immediate. A September 2024 survey found 67% of non-doms said they wouldn't have moved to the UK if they'd known these changes were coming. And 63% of remittance basis users planned to leave within two years.
Over 10,000 millionaires left the UK in 2024 alone-a 157% increase from the previous year.
For UK NRIs who are staying, the question became: how do I invest smarter under the new rules?
👉 Tip: If you were using the remittance basis before, the Temporary Repatriation Facility lets you bring pre-April 2025 funds into UK at reduced rates (12-15%) until 2028.
Why GIFT City Became the Answer
When UK NRIs started looking for alternatives, GIFT City ticked boxes that traditional NRI investments couldn't.
Reason 1: Tax Efficiency That Still Works
GIFT City interest is tax-free in India. No TDS. No Indian tax return needed.
Yes, you'll pay UK tax on it now. But here's the difference: NRO FDs deduct 30% TDS in India AND you pay UK tax. GIFT City skips the Indian tax entirely-you only deal with HMRC.
The compliance is cleaner. One tax authority instead of two.
For understanding the full FD taxation picture, we've broken down each deposit type separately.
Reason 2: Currency Protection Matters More Now
Under the old non-dom system, currency fluctuations were somewhat abstract. Money sitting in India wasn't immediately relevant to your UK finances.
Now that worldwide income is taxed, every rupee matters. INR has depreciated 3-5% annually against GBP over the past decade.
GIFT City's USD-denominated deposits eliminate that erosion. Your principal stays in hard currency. Your returns stay in hard currency.
Track the patterns yourself on our Rupee vs Dollar tracker.
Reason 3: Repatriation Without Friction
The new UK tax rules make repatriation timing less important-you're taxed on arising basis anyway. But ease of repatriation still matters for liquidity.
NRO accounts cap repatriation at $1 million per year with extensive documentation. GIFT City? No caps. Full repatriation in foreign currency.
When UK NRIs need funds quickly-property purchase, children's education, emergency-GIFT City delivers without bureaucratic delays.
Reason 4: Flexibility for Uncertain Times
Many UK NRIs are reconsidering their long-term plans. Stay in UK? Return to India? Move elsewhere?
GIFT City accommodates uncertainty. Tenures start at 7 days. You're not locked into 1-5 year commitments like traditional NRE FDs.
If your plans change, your money isn't trapped.
The Broader GIFT City Ecosystem
UK NRIs aren't just parking money in FDs. The entire GIFT City ecosystem is attracting attention.
Alternative Investment Funds: GIFT City AIFs offer exposure to venture capital, private equity, and hedge funds with favourable tax treatment. Category III AIFs are exempt from tax on distribution and redemption for non-resident investors.
Mutual Funds: Tata Asset Management launched their Dynamic Equity Fund at GIFT City in September 2025 with just $500 minimum-making GIFT City accessible beyond high-net-worth investors.
Insurance: From April 2025, life insurance proceeds from IFSC offices became tax-exempt, adding another product category.
Explore the GIFT City investment options available beyond fixed deposits.
What UK NRIs Are Actually Doing
Based on conversations in our community and client patterns, here's what I'm seeing:
The Cautious Approach: Start with a small GIFT City FD ($5,000-10,000) to test the process. Once comfortable, gradually shift a portion of NRE holdings.
The Diversification Play: Split between NRE (for INR exposure and DICGC insurance), GIFT City (for USD stability), and UK investments (ISA, pension contributions while still eligible).
The Return Planners: UK NRIs planning to return to India within 5-10 years are front-loading GIFT City investments. The tax-free status survives residential status change-a unique advantage.
For those planning eventual return, see our guide on investing if you plan to return to India.
The DTAA Safety Net
One concern I hear: "Won't I be double-taxed?"
The UK-India Double Taxation Agreement prevents this. You won't pay full tax in both countries.
For NRE and FCNR interest, there's even a "tax sparing" provision-the UK grants a notional 15% credit recognising the tax India foregoes by exempting NRI interest. This applies for ten years from account opening.
GIFT City interest, being tax-free in India, is straightforward. You pay UK tax only. No credits to claim, no forms to file with Indian authorities.
Our DTAA guide explains the mechanics in detail.
Is This Trend Sustainable?
I believe so. Several factors suggest GIFT City's appeal to UK NRIs will continue:
UK tax changes are permanent. The non-dom regime isn't coming back. UK NRIs need to optimise within the new framework, not wait for reversal.
GIFT City infrastructure is maturing. More banks, more products, more streamlined processes. What was experimental in 2020 is now established.
Regulatory clarity is improving. IFSCA continues refining frameworks. The 2025 Fund Management Regulations brought additional flexibility for NRI investors.
India's growth story remains compelling. UK NRIs want India exposure. GIFT City offers it without the compliance headaches of direct Indian market investment.
Getting Started
If you're a UK NRI considering GIFT City, start here:
Check your residential status to confirm NRI qualification.
Compare current options using our NRI FD comparison tool.
Run through the Compliance Compass to ensure you're meeting both Indian and UK requirements.
The shift is real. UK NRIs are voting with their money. And GIFT City is where that money is going.
Next Steps:
Join our WhatsApp community where UK NRIs share experiences and strategies daily.
Download the Belong app to explore GIFT City FDs and investment tools.
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