NRIs and OCIs can invest in GIFT City, including from the US. GIFT City investment eligibility has a second layer, though: some funds exclude "U.S. persons", a label that can cover an NRI living in Austin on an H-1B. The law lets you in, and the fund decides whether you stay in.
How GIFT City investment eligibility works for NRIs
Two gates decide whether you can invest, and passing the first doesn't pass the second. The first gate is the law: who IFSCA lets into the market. The second is the fund: who its own offer document accepts.
Gate one: what IFSCA allows
IFSCA, the regulator that runs GIFT City, names Non-Resident Indians and Overseas Citizens of India as eligible. Both can hold foreign-currency deposits with an IFSC unit of a bank and invest in alternative investment funds and mutual funds registered in the IFSC.
Resident Indians sit outside the NRI route and use the Liberalised Remittance Scheme (LRS), which caps remittances at USD 250,000 per financial year and needs Form A2 at an authorised dealer bank. RBI's 2021 circular also keeps residents out of IFSC securities issued by companies resident in India. Their choice is narrower than an NRI's.
Gate two: what the fund accepts
IFSCA sets market-wide rules, but each fund manager writes its own investor terms. One GIFT City fund manager lists U.S. persons, Canadian residents and investors from jurisdictions the Financial Action Task Force flags as non-compliant as excluded.
Another fund house opens its retail fund to NRIs, OCIs and eligible foreign investors. It says Indian residents aren't eligible and investors from the USA and Canada may be excluded.
Why an NRI in the US can be a "U.S. person" to a fund
Indian law and US securities law define residency differently, and a fund can apply either. Under Regulation S, 17 CFR 230.902(k), a U.S. person includes any natural person resident in the United States. Citizenship doesn't enter that test.
Take Priya, an H-1B holder in Austin. She's an NRI under Indian law, so IFSCA treats her as eligible. A fund that borrows the Regulation S wording can still call her a U.S. person and decline her.
Fund managers differ, and the offer document is the only place the definition is written down. Ask which definition applies before you fund anything.
What eligibility doesn't change: your US tax bill
Being eligible in India tells you nothing about your US return. India exempts non-resident investors from Indian tax on many IFSC fund returns, which the India-side tax benefits cover in detail. The US still taxes its citizens and residents on worldwide income.
A pooled GIFT City fund can be a PFIC, a passive foreign investment company, and the IRS expects a US shareholder to report each one on Form 8621.
Whether a given fund is a PFIC depends on its income and assets, so there's no blanket answer. A PMS account that holds securities in your own name is analysed differently, and the PMS structure matters. If you're a US tax resident, I'd settle the structure before chasing the return.
| Your status | IFSCA rules | Route in | What can still stop you |
|---|---|---|---|
| NRI living outside the US | Eligible | Foreign-currency account at an IFSC bank unit | The fund's own investor terms |
| OCI cardholder living outside the US | Eligible, named separately from NRIs | Foreign-currency account at an IFSC bank unit | The fund's own investor terms |
| NRI or OCI living in the US | Eligible | Foreign-currency account at an IFSC bank unit | A fund that bars U.S. persons, plus PFIC and FBAR reporting |
| Resident Indian | Not on the NRI route | LRS, up to USD 250,000 a year, Form A2 | Funds that bar residents, and RBI's exclusion of India-resident issuers |
If you live outside the US and hold no US status, the U.S. person exclusion and PFIC reporting don't touch you. Once you're resident in India again, your access narrows to the LRS route, and a GIFT City account you opened earlier needs a fresh look.
What to do before you open an account
- Confirm your status: NRI, OCI cardholder or resident Indian.
- Ask the fund manager for its investor eligibility terms and its definition of excluded persons, in writing.
- Ask whether the product is pooled or a PMS account, because that changes your US reporting.
- Ask your US CPA whether the fund is a PFIC before you wire money, and plan for filing Form 8621 if it is.
- Add the account to your foreign account count from day one.
The judgment call that needs a CPA is whether a specific fund is a PFIC. That answer depends on the fund's own numbers, which you can't read off a brochure.
Three beliefs about GIFT City eligibility that don't hold up
Living in the US doesn't rule you out
IFSCA lists NRIs and OCIs, and both live abroad by definition. The obstacle is a fund's own exclusion terms.
GIFT City doesn't make your income tax-free
India's exemption covers Indian tax only. Your country of residence taxes you under its own rules, and for a US taxpayer that means Form 1040 and often Form 8621.
A GIFT City account is still a foreign account
It's a financial account at a bank outside the US. Once your foreign accounts total more than USD 10,000 at any point in the year, the FBAR applies, and Form 8938 may apply too, depending on your thresholds.
The one check to run today
Open the fund's offer document and find its definition of excluded investors. That single definition tells you whether the account is worth opening. If you're a US taxpayer, I'd also run the fund past a CPA before you wire anything, and InvestMates can review that with you.
Frequently asked questions
Can an NRI open a bank account in GIFT City?
Yes. IFSCA says an NRI can approach the IFSC unit of a bank to open a foreign-currency account and place deposits in currencies such as USD, EUR and GBP. It's a different account from an NRE or NRO account, opened in foreign currency at the bank's IFSC unit.
What is the minimum investment for GIFT City?
It depends on the product. IFSCA's 2025 fund management regulations cut the minimum for a PMS account to USD 75,000 from USD 150,000, and at least one retail mutual fund launched in September 2025 starts at USD 500. Check each fund's offer document, because minimums differ by scheme.
Can a US citizen or green card holder invest in GIFT City?
Possibly, but only if the fund accepts U.S. persons. A US citizen or green card holder is a US taxpayer, so a pooled fund can bring PFIC rules and the account goes on your FBAR. Confirm the fund's terms and your reporting with a US CPA first.
Can a resident Indian invest in GIFT City?
Sometimes, and with narrower options than an NRI. A resident Indian can remit up to USD 250,000 per financial year under LRS, using Form A2, but some GIFT City funds bar Indian residents outright. RBI's 2021 circular also excludes IFSC securities issued by India-resident companies.