GIFT City: The New Frontier for Global Stocks, Mutual Funds and NRI Insurance

Gujarat International Finance Tec-City (GIFT City), India’s first International Financial Services Centre (IFSC), enables resident individuals and NRIs to invest in US-listed stocks, dollar-denominated mutual funds and insurance products via tax-efficient digital platforms. 

Investment in Global Stocks via GIFT City IFSC Exchanges 

Indian investors can trade in global equities through IFSC exchanges like NSE IFSC and India INX. Instruments such as Unsponsored Depository Receipts (UDRs) provide access to 50 top US-listed companies. Investors can also purchase fractional shares here.  

The entire process from account opening to trading operates under guidelines of the International Financial Services Centres Authority (IFSCA). Funds are transferred via the RBI's Liberalised Remittance Scheme. 

Mutual Funds in Dollars Without SEBI Overseas Investment Caps 

GIFT City allows investment in dollar-denominated passive fund-of-funds targeting indices like the S&P 500 and Nasdaq 100. These funds operate under IFSCA and are not affected by SEBI’s overseas investment caps.  

Investors remit money under the LRS in foreign currency, complete a KYC process, and invest through registered platforms. These FoFs directly invest in foreign ETFs, offering better tracking and bypassing layered taxation structures of locally domiciled global funds. 

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Insurance Offerings in GIFT City Tailored to NRI Needs 

GIFT City insurance products are denominated in USD and designed primarily for NRIs with global incomes and residency. Providers such as HDFC Life International and ICICI Prudential offer ULIPs, term plans and health insurance.  

These structures can include global fund strategies like equities and gold. For compliant policies, maturity proceeds can be tax-free under section 10 (10D) without premium limits. NRIs from DTAA countries need not submit a TRC or Form 10 for nil TDS on maturity. 

Conclusion 

GIFT City serves as a comprehensive platform enabling Indian investors to diversify into global assets. It simplifies access to global equities, dollar-based funds and insurance products under a regulated and efficient framework, particularly appealing to NRIs. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.