GIFT City, evolving since its inception, is now positioning itself as a more accessible platform for retail investors seeking to diversify their portfolios. At the Moneycontrol Mutual Fund Summit held in Bangalore on October 27, industry leaders Vaibhav Shah from Mirae Asset, Abhishek Tiwari of PGIM India, and Neil Parikh from PPFAS highlighted the potential surge of retail investors in this previously HNI and FII-dominated space. One of the most significant changes is the introduction of retail fund structures, which now allow minimum investment amounts as low as $5,000 to $10,000, a stark contrast to the former thresholds ranging from $75,000 to $250,000.

This shift is particularly important as it enables investors to avoid the 20% tax collected at source (TCS), applicable only on transfers exceeding Rs 10 lakh in a financial year. The onboarding process has also transitioned to a largely digital format, improving the overall investor experience, which is expected to mimic the ease of domestic mutual fund transactions. However, operational challenges remain, particularly due to the complexity of making investments under the Liberalised Remittance Scheme (LRS), necessitating enhanced investor education and a more robust banking infrastructure to facilitate smooth transactions.

As GIFT City gears up to attract retail capital into international investments, the demand for global exposure is evident. Mirae Asset's new outbound fund, focusing on semiconductors, artificial intelligence, and digital infrastructure, has already garnered significant interest. However, taxation issues persist, with funds in GIFT City facing capital gains tax on every transaction, which could hinder active portfolio management. To circumvent this, PPFAS plans to introduce three feeder funds next year, two passive and one actively managed, aiming to mitigate tax implications. Meanwhile, PGIM India continues to offer an array of international funds, boasting a cumulative AUM of Rs 2,344.72 crore as of September 30, 2025. As the ecosystem strengthens, GIFT City is poised to become a vital channel for retail investors looking to expand into foreign markets.