SIMPLY 3 FINSERV PRIVATE LIMITED [CIN: U67190PB2022PTC056099] is an AMFI Registered Mutual Fund Distributors & SIF Distributor (ARN-249158)
Introduction
As global investing gains popularity among Indian investors, many have found their options limited due to the industry-wide overseas investment limits applicable to domestic mutual funds. An alternative route available to resident Indians is investing through GIFT City (Gujarat International Finance Tec-City), India's International Financial Services Centre (IFSC).
GIFT City provides access to a range of global investment opportunities, subject to applicable regulations and investment limits.
Understanding the Framework
Resident Indians can invest in select international financial products through GIFT City using the Reserve Bank of India's Liberalised Remittance Scheme (LRS).
Key Features
• Access Beyond Domestic Mutual Fund Limits
Certain investment products available through GIFT City operate under a separate regulatory framework and are not subject to the overseas investment limits applicable to domestic mutual fund schemes.
• Annual Investment Limit
Resident individuals can remit up to USD 250,000 per financial year under the LRS framework.
• Shared LRS Limit
The USD 250,000 limit is cumulative and includes other eligible overseas remittances such as foreign travel, overseas education, gifts, and investments.
• Foreign Currency Exposure
Investments are generally denominated in foreign currencies, typically USD, which may provide diversification benefits while also exposing investors to currency fluctuations.
• Product Availability
Only products approved by the International Financial Services Centres Authority (IFSCA) and permitted for resident Indian investors can be accessed. Eligibility may vary across products.
Minimum Investment Requirements
Investment thresholds differ depending on the investment route.
| Investment Route | Minimum Investment |
| Direct Equity Trading through GAP Framework | May vary by broker; often no mandatory minimum |
| Offshore Mutual Funds / Feeder Funds | Typically USD 5,000 initial investment and USD 500 for additional investments |
| Alternative Investment Funds (AIFs) | Generally USD 150,000 |
Minimum investment requirements are subject to change and may vary across providers.
Two Common Routes to Global Investing
1. Investing in Global Stocks and ETFs
Investors can open an account with an IFSCA-registered broker operating under the Global Access Platform (GAP) framework.
This route provides access to:
• US-listed stocks
• International ETFs
• NSE IFSC Receipts and other eligible securities
Many platforms offer a digital onboarding process, making account opening and investing relatively seamless.
2. Investing Through Offshore Mutual Funds
Several Asset Management Companies offer IFSCA-regulated offshore funds and feeder fund structures.
The investment process is similar to mutual fund investing in India, with funds remitted overseas through the LRS route and invested in the underlying global portfolio.
Costs and Tax Considerations
Before investing internationally, investors should understand the associated costs and tax implications.
Tax Collected at Source (TCS)
Under current LRS regulations, remittances for overseas investments exceeding ₹10 lakh in a financial year attract TCS at applicable rates.
TCS is not an additional tax liability. It can generally be adjusted against the investor's income tax liability or claimed as a refund while filing the Income Tax Return (ITR), subject to applicable tax provisions.
Capital Gains Taxation
The taxation of gains depends on the nature and structure of the investment and prevailing tax laws. Tax treatment may differ for foreign equities, ETFs, mutual funds, debt instruments, and other securities.
Investors should consult their tax advisor before investing and prior to redemption.
Final Thoughts
Global investing can help investors diversify beyond domestic markets and gain exposure to businesses, sectors, and economies across the world. GIFT City has emerged as an important gateway for Indian residents seeking international investment opportunities within India's evolving financial ecosystem.
However, international investing involves market risk, currency risk, regulatory considerations, and taxation complexities. Investors should carefully evaluate their financial goals, risk appetite, and investment horizon before investing.
Disclaimer
This article is for educational purposes only and should not be construed as investment, legal, or tax advice. Investors should consult their investment and tax experts before making investment decisions. The regulatory framework, tax provisions, and product availability are subject to change.
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