Global Investing for Indians: GIFT City Funds vs Overseas Platforms – Costs, Taxes, and Compliance Explained

Global Investing for Indians: GIFT City Funds vs Overseas Platforms – Costs, Taxes, and Compliance Explained

Indian Investors Eye Global Markets Amid Rising Opportunities

Comparing GIFT City IFSC Funds with Direct Overseas Investments

By Business Reporter

New Delhi: February 18, 2026:

As Indian investors increasingly look beyond domestic markets, global investing has become a mainstream portfolio choice. From buying shares of Apple, Tesla, or Microsoft to participating in international mutual funds, the appetite for overseas exposure is growing rapidly. However, the route chosen—whether through GIFT City funds or overseas platforms—can significantly impact costs, taxation, compliance, and ease of investing.

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The Gujarat International Finance Tec-City (GIFT City), India’s first International Financial Services Centre (IFSC), has emerged as a gateway for global investments. At the same time, overseas brokerage platforms and direct remittances under the RBI’s Liberalised Remittance Scheme (LRS) remain popular. This article explores the pros and cons of both approaches, offering clarity for investors keen to diversify globally.

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What is GIFT City and Why It Matters

GIFT City, located in Gandhinagar, Gujarat, was established to provide a world-class financial hub for international transactions. It allows Indian investors to access global markets without the hassle of opening foreign brokerage accounts.

Key features:

• IFSC framework: Regulated by the International Financial Services Centres Authority (IFSCA).
• Tax incentives: Certain exemptions on capital gains and withholding taxes.
• Ease of access: Indian mutual funds and asset managers can launch global funds directly from GIFT City.
• Compliance advantage: Investments routed through GIFT City are treated as domestic, simplifying reporting.

Overseas Platforms: The Traditional Route

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Many investors still prefer overseas platforms such as Interactive Brokers, Vested Finance, or Stockal, which allow direct purchase of US-listed stocks and ETFs. These platforms operate under the LRS limit of $250,000 per person per financial year, enabling individuals to remit funds abroad for investments.

Advantages:

• Direct ownership: Investors hold shares in their own name.
• Wider choice: Access to thousands of global stocks and ETFs.
• Flexibility: Ability to trade actively and diversify across geographies.

Challenges:

• High compliance burden: Requires disclosure in income tax returns and adherence to FEMA rules.
• Tax complexity: Gains are taxed in India, and dividends may attract withholding tax abroad.
• Costs: Brokerage fees, forex conversion charges, and remittance costs add up.

Comparative Analysis: GIFT City vs Overseas Platforms

Taxation Differences

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Taxation is a key factor in choosing between the two routes:

• GIFT City funds:
  • Treated as domestic investments.
  • Capital gains taxed as per Indian rules (long-term vs short-term).
  • Certain exemptions on withholding taxes.
• Overseas platforms:
  • Dividends attract foreign withholding tax (e.g., 25–30% in the US).
  • Gains taxed in India under capital gains provisions.
  • Double taxation treaties may provide relief, but compliance is complex.

Compliance Burden

• GIFT City: Investors do not need to file additional LRS disclosures. Investments are routed through Indian AMCs, making compliance straightforward.
• Overseas platforms: Investors must disclose foreign assets in Schedule FA of their income tax returns. They must also comply with FEMA and RBI guidelines.

Costs and Fees

• GIFT City funds: Investors pay fund management fees, like domestic mutual funds. Forex conversion is handled at the AMC level.
• Overseas platforms: Investors bear forex conversion charges, remittance fees, and brokerage commissions.

Investor Suitability

• GIFT City funds: Best suited for retail investors seeking global exposure with minimal compliance hassle.
• Overseas platforms: Ideal for sophisticated investors who want direct control, active trading, and access to niche global assets.

Risks and Challenges

• Currency risk: Both routes expose investors to forex fluctuations.
• Regulatory changes: Future amendments to LRS or IFSC rules could impact investments.
• Market risk: Global equities are subject to volatility, geopolitical tensions, and sector-specific risks.

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Expert Opinions

Financial advisors note that GIFT City funds democratize global investing, making it accessible to retail investors. Meanwhile, overseas platforms remain attractive for those comfortable with compliance and willing to bear higher costs for direct ownership.

Conclusion

Global investing is no longer a luxury—it is becoming a necessity for diversification. For Indian investors, GIFT City funds offer a simplified, tax-efficient, and compliant route, while overseas platforms provide flexibility and direct ownership at the cost of higher compliance and expenses.

The choice depends on the investor’s profile:

• Retail investors may prefer GIFT City funds for ease and simplicity.
• Experienced investors may opt for overseas platforms for broader access and control.

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As India’s financial ecosystem evolves, both routes will coexist, offering investors multiple pathways to participate in the global economy.

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