GIFT City, India’s first international financial services hub, has launched a set of domestic‑registered international schemes that let retail investors buy foreign equities without the traditional hurdles of overseas mutual funds. The move comes as the Liberalised Remittance Scheme (LRS) cap of ₹2 lakh per financial year continues to restrict the amount Indian salaried professionals can send abroad, prompting many to seek regulated alternatives for global exposure. These GIFT City funds are structured as offshore‑linked schemes but are distributed through Indian mutual fund houses, allowing investors to subscribe via systematic investment plans (SIPs) of up to ₹25,000 a month.
While the LRS limit still applies, the funds bypass the need for a separate offshore account, reducing paperwork and settlement delays. 5% and 1% and investors also bear modest currency conversion and custodial charges, which are disclosed upfront. From a tax perspective, dividends from these schemes are taxed at 20% plus applicable surcharge, while capital gains follow the Indian equity tax regime – 15% short‑term and 10% long‑term on gains exceeding ₹1 lakh, with relief under relevant double‑taxation avoidance agreements.
The low correlation of global equities with the Sensex and Nifty can enhance portfolio diversification, though currency risk remains a factor. For the average salaried professional, GIFT City funds provide a regulated, cost‑effective gateway to US and European markets, complementing domestic holdings and potentially smoothing portfolio volatility. Careful monitoring of LRS limits, fees and tax implications is essential before allocating a portion of savings to these international schemes.