How NRI Investors Can Compare Global Fund Options Available via GIFT City

Imagine an NRI in Dubai looking at two GIFT City funds that both promise "global equity" exposure. One is a retail scheme with a modest minimum. The other is a restricted scheme that needs a much larger cheque. Both sound similar on a factsheet, yet they differ in rules, liquidity, disclosure and suitability.

This is the real challenge with GIFT City investment for NRIs. The question is rarely whether to invest; it is which fund structure fits your goals. GIFT City funds are regulated by the International Financial Services Centres Authority (IFSCA), are typically denominated in foreign currency and, under India's tax framework, may offer specific exemptions for non-resident investors when conditions are met.

This guide compares the main GIFT City global funds side by side, explains how each one works and shows when each option tends to make sense for an NRI investor.

The Core Difference: Structure Shapes the Investment

All GIFT City funds operate under the IFSCA (Fund Management) Regulations, 2025. What separates them is the scheme type, which determines who can invest, how much you need, how often the fund is valued and how much it can invest in unlisted assets.

For most NRI investors, the comparison comes down to three options:

• Retail schemes: Open to a broad base of investors, with stricter diversification and disclosure rules.

• Exchange traded funds (ETFs): Listed funds that track an index and trade on an IFSC exchange.

• Restricted schemes: Funds for larger investors, with higher minimums and more flexible investment rules.

Retail Schemes vs ETFs vs Restricted Schemes at a Glance

Feature	Retail scheme	IFSC ETF	Restricted scheme
Typical investor	Individual investors seeking managed global exposure	Cost-conscious investors seeking index exposure	Larger or experienced investors
Minimum investment	Set by each scheme; Value Research (June 2026) reported a typical USD 5,000	Price of units traded on the exchange	USD 150,000 under the regulations
How you buy and sell	Subscribe and redeem with the fund	Buy and sell on a recognised IFSC exchange	Subscribe as per the placement memorandum
Valuation frequency	Daily NAV for open-ended schemes	Market price during trading, plus NAV	Monthly NAV for open-ended schemes
Diversification rules	Limits on single company and sector exposure	Index rules on number and weight of holdings	More flexible
Unlisted exposure (open-ended)	Up to 15% of AUM	Index-based	Up to 25% of AUM
Disclosure	Offer document filed with IFSCA	Offer document and exchange disclosures	Placement memorandum

How the Options Compare on Cost, Currency and Tax

Structure is only part of the picture. Before choosing between NRI investment options in GIFT City, compare these practical factors:

Factor	What to check
Total cost	Management fees, fund expenses, entry or exit loads and brokerage for ETFs
Currency	The fund's base currency, the currencies of its holdings and conversion costs into your home currency
Underlying route	Whether the fund invests directly or through an overseas feeder or fund-of-funds, which can add a second layer of fees
Liquidity	Redemption frequency, notice periods and, for ETFs, trading volumes
Indian tax	Eligibility for exemptions available to non-resident unit holders of specified funds
Home-country tax	How your country of residence taxes fund income and gains

➜ What NRIs should know about tax

Under Schedule VI of India's Income Tax Act, 2025, income of a non-resident unit holder from a "specified fund" in an IFSC, and gains on transferring its units, may be exempt from Indian tax. Specified funds include IFSC retail schemes, ETFs and Category III AIFs that meet the prescribed conditions.

The exemption is condition-based, so confirm a fund's status before investing. It also covers Indian tax only. Your country of residence may still tax the income, so speak to a tax adviser in both jurisdictions.

When a Retail Scheme Makes Sense

➤ A retail scheme may suit you if you:

• Want a professionally managed global portfolio rather than picking stocks yourself.

• Prefer the investor protection built into retail rules, such as daily NAVs and diversification limits.

• Are starting with a moderate amount and want to build exposure over time.

When an ETF Makes Sense

➤ An IFSC ETF may suit you if you:

• Want low-cost, rules-based exposure to a specific index.

• Value the ability to buy and sell during trading hours.

• Are comfortable placing orders through an IFSC broker and monitoring trading volumes.

  
  

When a Restricted Scheme Makes Sense

➤ A restricted scheme may suit you if you:

• Can commit USD 150,000 or more and hold for a longer period.

• Want access to strategies with more flexibility, including higher unlisted exposure.

• Are comfortable with less frequent valuation and a placement memorandum rather than a public offer document.

Questions to Ask Before You Choose

➤ Whichever structure you lean towards, ask each fund manager:

1. Is the fund manager registered with IFSCA, and in which category?

2. What exactly does the fund hold, and does it invest through another overseas fund?

3. What is the total annual cost, including any underlying fund fees?

4. Does the fund qualify as a specified fund for non-resident tax purposes?

5. How and when can I redeem, and in which currency are proceeds paid?

If you want a deeper look at the rule changes behind these structures, our article on IFSCA Fund Management Regulations 2025 explains the key reforms.

How GIFT CFO Supports NRI Investors

Comparing funds involves regulation, tax and cross-border planning, not just returns. GIFT CFO's Investment Options via GIFT City advisory works with NRIs, OCIs and other investors looking to deploy capital across global markets through India's IFSC. Alongside investment facilitation, GIFT CFO offers FEMA and AML/KYC compliance support and estate and tax structuring for investors, helping you see how a fund choice fits your wider financial position.

Compare the Structure Before You Compare Returns

GIFT City investment for NRIs offers a regulated, foreign-currency route to global markets from within India's IFSC. The best choice depends on matching the fund structure, retail scheme, ETF or restricted scheme, to your investment amount, time horizon, liquidity needs and tax position.

Start with structure, then cost, currency and tax, and only then look at past performance. That order helps you choose a fund that suits you rather than one that simply looks good on a factsheet.