The GIFT City Question: Onshore, Offshore, or Both?

Every Indian family with global members eventually confronts the same architectural question: where should the wealth live? For three decades the honest answer was "partly abroad": a Singapore fund here, a Mauritius vehicle there, a Dubai holding company for the NRI branch. GIFT City, India's International Financial Services Centre at Gandhinagar, was conceived to repatriate that architecture. Treated as foreign territory for financial and exchange-control purposes yet sitting under Indian sovereignty, and governed by a single unified regulator, the IFSCA, it lets capital operate in dollars, under globally aligned rules, without leaving the country.

For years the idea outran the reality. That gap is now closing quickly. In April 2026, the IFSCA approved the first Foreign Family Investment Fund under its 2025 regulations, a milestone that validates GIFT City as a jurisdiction for family offices, cross-border estate planning and global wealth structures, not merely for trading desks. Industry estimates put commitments in GIFT-domiciled alternative investment funds above $12 billion by end-2025, and projections see the centre's fund-management ecosystem crossing $100 billion by 2030.

What the structure actually saves

The fiscal architecture is deliberate and generous. IFSC entities enjoy a ten-year tax holiday, with the window extended to 2030. For NRI and foreign investors, dividend income from IFSC units is taxed at a concessional 10 per cent; capital gains on specified IFSC-listed securities attract roughly 9 per cent or, in defined cases, exemption; income from qualifying derivatives with offshore banking units is exempt under Section 10(4E); and IFSC exchange transactions carry no securities transaction tax, commodities transaction tax or GST. Because GIFT City transactions occur in foreign currency, treaty benefits under India's DTAAs remain accessible, without the treaty-shopping anxieties that now shadow Mauritius and Singapore structures.

Access has widened as fast as the tax case. SEBI's 2024 decision permitted 100 per cent NRI ownership of GIFT-domiciled funds; the AIF minimum fell from $150,000 to $75,000 in February 2025, with select accredited-investor funds admitting $50,000; and retail-oriented GIFT mutual funds now accept as little as $500. From April 2026, offshore funds can relocate to GIFT City tax-neutrally, an explicit invitation to structures currently sitting in Mauritius or Singapore to come home.

Onshore, offshore, or a third pole

The deeper question for a family is not tax; it is architecture. Resident members can route up to $250,000 per person per year into GIFT vehicles under the Liberalised Remittance Scheme. NRI members can hold dollar assets with clean repatriation and, for US persons, structures (separately managed accounts rather than pooled funds) that sidestep punitive PFIC treatment. The 2026 Iran war added an unplanned argument: families concentrated in a single offshore hub watched regional risk reprice overnight, and GIFT City is increasingly viewed not as a replacement for Dubai or Singapore, but as an additional India-linked base that diversifies jurisdictional exposure itself.

The question is no longer whether to be onshore or offshore. It is whether your structure chart has been redrawn since the rules changed, because the rules have changed.

The Private Research Desk

Where the polish is still drying

GIFT City remains a young jurisdiction. Liquidity on IFSC exchanges trails mature hubs; the professional ecosystem, while growing rapidly, is still shallower than Singapore's; rules continue to evolve, which cuts both ways; and foreign-currency deposits sit outside domestic deposit insurance. US-resident members need country-specific advice before touching any pooled vehicle. Our view: for Indian families with cross-border members, GIFT City has graduated from curiosity to a serious third pole in the structure chart: best entered deliberately, one vehicle at a time, with the family constitution and the tax opinions written before the first dollar moves.