NRI capital in GIFT City dollar funds rose 18.59% in Q4 FY26, according to the International Financial Services Centres Authority’s official Q4 FY26 bulletin.
Diaspora-linked fund allocations from Non-Resident Indians and Overseas Citizens of India reached $747.27 million in the January-March quarter of FY26, up from $630.13 million in the previous quarter. The increase shows growing interest in GIFT City’s dollar-denominated investment structures among global Indian investors.
For readers new to the structure, GIFT City is India’s IFSC hub for NRIs and global investors, offering foreign currency-based financial services under a unified regulatory framework.
GIFT City Dollar Funds See Higher NRI and OCI Participation
By the end of March 2026, active Fund Management Entities increased to 217 from 202 in Q3, while registered fund schemes rose to 360 from 327. Total active investors across all fund schemes climbed to 9,594.
Retail schemes saw the sharpest rise, with investors increasing from 1,239 to 3,438 over 90 days. That 177.5% jump points to stronger participation from individual investors, including diaspora-linked accounts, alongside institutional commitments.
Why NRIs Are Looking at IFSC Investment Structures
GIFT City funds are gaining attention because they offer dollar-denominated exposure, regulatory flexibility and tax-related advantages under the IFSC framework.
NRIs using IFSC Banking Units can hold balances in US dollars, with reported yields ranging from 2.5% to 5% on pure USD balances. Under the statutory framework described in the bulletin, interest income for non-residents remains outside Indian domestic tax.
Rupee Risk Adds to GIFT City’s Appeal
For NRIs using traditional NRE, NRO or domestic mutual fund routes, capital is generally converted into rupees. If the rupee weakens, repatriated value can be affected.
Dollar-native GIFT City fund structures allow investors to remain connected to India’s growth story while reducing direct rupee exposure. The Q4 FY26 data suggests GIFT City is becoming a stronger bridge for NRIs and OCIs seeking India-linked investment opportunities without fully shifting capital into rupee-based products.
