GIFT IFSC to Build a Robust Pension Fund Framework for NRIs and Foreign Nationals

The International Financial Services Centres Authority (IFSCA) has proposed a new pension framework at GIFT City aimed at creating a globally competitive and inclusive retirement ecosystem for Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). 

The consultation paper outlines a forward-looking structure that combines regulatory strength, investment flexibility, and global accessibility to make the IFSC a leading pension hub.

Building a Global Pension Ecosystem

According to the proposal, the framework is designed to serve approximately 15 million NRIs and 19 million PIOs, enabling them to invest in a structured, regulated pension system anchored in India’s premier financial centre.

Applicants seeking to manage pension funds must have at least 10 years of relevant experience and maintain a minimum net worth of $1 million. Each Pension Fund Manager (PFM) must also appoint at least three senior employees to oversee fund operations and compliance.

Flexible, Transparent Scheme Design

The proposed model emphasises voluntary participation and full flexibility for subscribers to decide their contribution amount and frequency, monthly, quarterly, annually, or in lump sums. 

The schemes will be open exclusively to NRIs and foreign citizens aged 18 and above. Investors can choose between active choice (customised asset allocation) or auto choice (default life-cycle fund). 

Withdrawals will be allowed at retirement, superannuation, or after a lock-in period for specific purposes such as higher education, housing, or critical illness.

Participants can select among four payout modes: Systematic Withdrawal Plan (SWP), annuity, a mix of both, or deferred withdrawal up to age 75. At least 20% of the corpus must remain under SWP or annuity options to ensure stable post-retirement income.

IFSCA Pension Framework to Strengthen GIFT City’s Global Appeal

The framework emphasises prudent diversification across equity, fixed income, real assets, and commodities, aligned with the long-term nature of pension liabilities. Pension assets may be fully invested in India or diversified globally, with exposure limits of 20% per country and up to 50% for the United States. 

Fund managers must maintain adequate liquidity and implement strong risk management systems to protect subscriber interests, guided by transparency, governance, and capital preservation principles. 

Through this initiative, the IFSCA aims to attract global investors and strengthen GIFT City’s position as a cross-border financial hub, reflecting its commitment to building an internationally benchmarked pension ecosystem that serves global Indians and enhances India’s financial interconnectivity. 

Read More: IFSCA Hits $100 Billion in Banking Assets at GIFT City!

Conclusion

The proposed pension framework represents a strategic step toward establishing GIFT City as a global centre for retirement savings and wealth management. If implemented, it could provide millions of overseas Indians with a secure, flexible, and transparent platform to build their long-term financial futures while reinforcing India’s emergence as a global financial powerhouse.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/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.