Investing abroad
Indian regulator · US dollars
Foreign markets, in dollars, through GIFT City funds.
GIFT City funds let Indian residents invest in foreign markets, priced in US dollars and regulated in India. They sit outside the limit that has paused many international funds. Here is how they work and who they suit.
What it is
An Indian address for a foreign investment
GIFT City is not abroad. It is India's international finance centre, in Gandhinagar, Gujarat, with its own regulator, IFSCA. Funds based there invest in foreign markets and are priced in US dollars.
You buy them from your normal Indian bank account, by sending money under the RBI's Liberalised Remittance Scheme (LRS). No separate GIFT City bank account is needed, and most of the paperwork is digital.
International fund in India
Priced in rupees.
Can pause when the limit fills.
GIFT City fund
Priced in US dollars.
Uses your own LRS limit.
Side by side
What actually changes
Why investors use them
Four reasons, each with a condition
Save in the currency of the bill
If a child's education abroad will be paid in dollars, part of the saving can sit in dollars too. Over the long run the rupee has lost roughly 3% a year against the dollar on average — not in a straight line, and it can move the other way. This reduces currency risk; it does not remove it.
Open when international funds are paused
Indian fund houses can invest abroad only up to an industry-wide limit of $7 billion, set by the RBI. Several stopped fresh money in 2026. GIFT City funds sit outside that limit.
Tax handled inside the fund
The fund pays tax on its gains, so there is nothing more to pay in India when you redeem. If you redeem within two years, a higher short-term tax applies inside the fund.
Simple to start
You invest from your normal Indian bank account. No separate GIFT City account and no foreign broker are needed.
How it works
From your bank account to a dollar fund
Check the fit
A goal with a foreign-currency bill, or a wish to keep part of your money outside India — with money you will not need in the next few years.
Choose index or active
Index funds follow a market and cost less. Active funds have a manager picking shares, cost more, and can do better or worse than the market.
Send money under LRS
Complete the fund's KYC, then remit from your bank. Once your total remittances in a year cross ₹10 lakh, the bank collects 20% TCS on the money you send to invest above that.
Top up when you like
You can add money later. Each top-up is a fresh remittance from your bank.
Questions
What clients ask us
Index or active — which should I choose?
Neither is better on its own. Index funds follow a market — large US companies, developed markets or emerging markets — at low cost, with no manager's judgement to go wrong, but you get the whole market as it is, even when a few big companies make up a large share of it. Active funds have a manager who picks shares; they cost more, can do better or worse than the market, and need patience. The goal decides.
Is the money tax-free when I redeem?
There is nothing more to pay in India when you redeem, because the fund has already paid tax on its gains. If you redeem within two years, a higher short-term tax applies inside the fund, and most options, though not all, also charge an exit load.
How does TCS work on GIFT City investments?
Once your total foreign remittances in a financial year cross ₹10 lakh, all purposes counted, your bank collects 20% TCS on the money you send to invest above that. It is not an extra tax. You adjust it against your tax, or get it back, when you file your return.
Can I invest every month, like a SIP?
Not as an automatic monthly debit. You start with a lump sum and can add top-ups whenever you like. Each top-up is a fresh remittance from your bank under LRS.
What are the risks?
Foreign markets can fall. The rupee can strengthen against the dollar and reduce what you get back in rupees. And these funds are new — the oldest has been investing for only about a year, so none has a long record yet.
Who should not invest in GIFT City funds?
Anyone who may need the money in the next few years, and anyone hoping to replace their Indian portfolio. GIFT City funds are an addition, for a dollar goal or for some money outside one country. Your core investments in India stay where they are.