What is GIFT City and why are asset managers interested in launching retail funds there?

GIFT City is an international financial centre in India that allows financial services to non-residents and residents, including institutions and retail investors, in foreign currency. Asset managers are interested in launching retail funds in GIFT City due to recent tax clarity and improvements in the ecosystem, including the presence of global registrars and transfer agents.

Which mutual fund companies have already launched or applied to launch retail schemes in GIFT City?

DSP Mutual Fund has already launched its first retail scheme from GIFT City, while subsidiaries of PPFAS Mutual Fund and NJ Mutual Fund have applied to the regulator to launch their own retail-focused schemes.

What are the key advantages of launching retail funds in GIFT City compared to India?

The main advantages include tax clarity, a developing ecosystem for registrars and transfer agents, and the ability to offer investment opportunities in global equities to Indian retail investors. However, challenges remain, such as the lack of digital KYC and omnibus structures, as well as higher costs for small-ticket retail investors.

Home / Business and Economy / GIFT City Draws Asset Managers to Launch Retail Investment Schemes

GIFT City Draws Asset Managers to Launch Retail Investment Schemes

27 Aug

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Summary

DSP Mutual Fund launches first retail scheme in GIFT City
PPFAS and NJ Mutual Fund apply to launch retail funds
Tax clarity and ecosystem improvements attract more AMCs

GIFT City Draws Asset Managers to Launch Retail Investment Schemes

As of August 27, 2025, the international financial centre of GIFT City is attracting growing interest from asset managers looking to launch retail investment schemes. In the past year, the government has provided tax clarity, which has encouraged more asset management companies (AMCs) to consider setting up retail funds in GIFT City.

DSP Mutual Fund has already taken the lead, launching its first retail scheme from GIFT City. Additionally, subsidiaries of PPFAS Mutual Fund and NJ Mutual Fund have applied to the regulator, the International Financial Services Centres Authority (IFSCA), to launch their own retail-focused schemes in the financial hub.

The development of a robust ecosystem, including the presence of global registrars and transfer agents (RTAs) capable of handling the larger investor base of retail funds, has further bolstered the appeal of GIFT City for AMCs. Previously, most funds launched in GIFT City were non-retail products, such as Category III Alternative Investment Funds, which have seen total commitments of over $10 billion as of June 2025.

However, the tax clarity provided in last year's Union Budget, along with other structural improvements, have now started drawing more asset managers to consider retail schemes in GIFT City. Experts believe that outbound retail schemes, where Indian investors can access global equities, are likely to see more demand than inbound investments from overseas investors.

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