GIFT City funds: How retail investors can access global markets as international schemes face curbs

As international mutual funds breach overseas investment limits, several schemes have either stopped accepting fresh investments or reopened for limited periods. However, GIFT City offers an alternative route for Indian retail investors seeking global exposure.

Here’s what retail investors need to know about investing through GIFT City.

Aditya Agarwal, Co-Founder, Wealthy.in said, “GIFT City is currently the main open channel for a resident Indian who wants meaningful global equity exposure through a pooled fund.”

Agarwal said seven retail outbound schemes across five fund houses were live. All are USD-denominated, open-ended, and IFSCA-registered, and available to resident Indians under LRS. He explained the structure of each fund.

He said PPFAS and HDFC funds are passively managed, tracking indices without taking active calls, while DSP and Edelweiss are actively managed.

According to Agarwal, PPFAS offers US exposure through the S&P 500 and Nasdaq 100. HDFC covers developed and emerging markets. DSP provides global exposure, while the Edelweiss fund offers concentrated Greater China exposure through a JPMorgan Greater China fund.

“Following the 25 August 2026 change, PPFAS has the lowest entry at $500, while the other funds still require $5,000. The top-up is $500 for all funds,” he mentioned.

Agarwal noted that “For a resident individual, a GIFT City investment is an LRS remittance and consumes your LRS limit, even though the money never physically leaves India”.

He said LRS permits a resident individual to remit up to $250,000 per financial year across all purposes — overseas investment, foreign travel, education, medical treatment, gifts and maintenance of relatives abroad.

No. “There is currently no rupee auto-debit SIP available in GIFT City outbound funds,” Agarwal said.

Agarwal said investors can access the US, Japan, the UK, Canada, France, Taiwan, South Korea, China, India, Brazil, Singapore, Hong Kong, and others.

Agarwal said foreign exchange costs apply both ways, with around a 2% spread on a round trip, plus SWIFT, bank, and fund fees—making small, frequent investments costlier.

He said tax is another drawback. Gains within 24 months are taxed at roughly 42.75% irrespective of your slab, while the concessional 14.95% rate applies only after two years, versus 12 months for domestic equity.

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