What Is GIFT City, and What Is an IFSC?
The short version. GIFT City — Gujarat International Finance Tec-City — is a purpose-built financial district in Gandhinagar, Gujarat. Within it sits India's International Financial Services Centre (IFSC): a separately regulated zone where financial institutions can transact in foreign currency, under rules distinct from the rest of India's domestic financial system. It's the reason a "GIFT City fund" behaves differently from a regular Indian mutual fund from the moment you invest.
Why a separate zone exists. Most Indian financial products operate in rupees, under SEBI, RBI and other domestic regulators built for a rupee-denominated system. The IFSC exists so India could host US-Dollar-denominated financial activity — banking, fund management, insurance, capital markets — on Indian soil, under a single regulator designed specifically for that purpose: the IFSCA.
Who regulates it: the IFSCA. The International Financial Services Centres Authority (IFSCA) is the unified regulator for all financial services within GIFT City's IFSC — replacing the need to deal separately with SEBI, RBI, IRDAI and PFRDA for IFSC-based activity. For fund investors specifically, IFSCA is the body that licenses and oversees the Fund Management Entities (FMEs) that actually run GIFT City funds.
Where funds fit into this. A "GIFT City fund" is a fund registered with and regulated by the IFSCA, managed by a Fund Management Entity based in the IFSC, and denominated in a foreign currency — almost always US Dollars. It can be structured to bring money into India (an inbound fund) or to take Indian or global money out into international markets (an outbound fund).
See how these fund structures actually work
A short timeline
- December 2015: India's first International Financial Services Centre is set up in GIFT City.
- 2019: Parliament passes the International Financial Services Centres Authority Act, 2019.
- 27 April 2020: IFSCA is established under that Act as the single regulator for financial services in India's IFSCs.
- Since then: IFSCA has issued its own regulations for fund management, capital markets, banking and insurance, including the IFSCA (Fund Management) Regulations, 2025 that govern GIFT City funds today.
GIFT City is not all IFSC
GIFT City has two parts. The IFSC is the international zone, where business is done in foreign currency under IFSCA. The Domestic Tariff Area is the rest of the city, where ordinary Indian rules apply. A "GIFT City fund" in the sense used on this site is one registered in the IFSC, not simply a business with a GIFT City address.
What happens inside GIFT IFSC
- Banking: IFSC Banking Units of Indian and foreign banks offer foreign-currency accounts and deposits.
- Capital markets: international exchanges list and trade securities in foreign currency.
- Fund management: Fund Management Entities run retail schemes, AIFs and PMS portfolios — the "GIFT City funds" this site explains.
- Insurance, aircraft leasing and fintech: other activities IFSCA regulates, less relevant to individual investors.
Common questions
Is GIFT City a tax haven?
No. It is an Indian financial centre with its own regulator and certain tax concessions for IFSC units. Investors are still taxed according to India's rules and those of their country of residence. See Regulation and Taxation.
Do I have to visit GIFT City to invest?
Generally no. Onboarding with a Fund Management Entity is usually done with documents and video or digital KYC. See How to Invest.
How do I check that a fund manager is registered?
Search the IFSCA Directory of regulated entities, linked below, and match it with the registration details in the fund's offer document.
Why this matters for you:
- Transactions happen in USD, not INR
- A different regulator (IFSCA) with a different rulebook
- Designed specifically to bridge India and global capital markets
- Available to NRIs, OCIs, foreign nationals, and — via the LRS — resident Indians
Next: see how GIFT City funds are actually structured → /funds-explained
Common questions
What is the full form of GIFT City?
Where is GIFT City in Gandhinagar?
Official sources
Rules change. Check the current position with the authority that sets it.
- IFSCA — International Financial Services Centres Authority — The regulator for all financial services in GIFT IFSC.
- GIFT City — official website — Gujarat International Finance Tec-City.
- IFSCA Directory of regulated entities — Check that a Fund Management Entity is registered.