Positive impactSector
GIFT City funds vs international mutual funds: Returns, minimum investment and tax compared
Mint 57 min ago·22 Oct 2026, 4:22 am
With the RBI's overseas investment cap limiting fresh flows into traditional international mutual funds, GIFT City funds have emerged as a popular alternative for Indian investors. These funds are managed from the Gujarat International Finance Tec-City (GIFT City) and allow you to invest in US and global equities directly, bypassing the traditional route. This shift is significant because it opens up a new avenue for diversification, especially when domestic markets are volatile.
For investors, the key benefits include potentially more tax-efficient returns and the ability to invest even when the standard LRS limit is fully utilized. While GIFT City funds offer flexibility, they come with their own set of rules, such as specific minimum investment amounts and varying tax treatments compared to regular international funds. It is important to understand these differences before allocating your capital.
Going forward, the most important factor to watch is the regulatory stance on GIFT City funds. As more investors turn to this route, the RBI may adjust the LRS limit or introduce new guidelines. Investors should stay updated on any policy changes to ensure their investment strategy remains compliant and optimized for returns.
Excerpt from Mint
With many international mutual funds closed to fresh investments under RBI’s $7 billion overseas cap, GIFT City funds offer Indian investors another route to US and global equities. Here’s how they compare on minimum investment, taxation and returns, and what the LRS limit means for you. Indian investors seeking…Read the original at Mint
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