What Is Available in GIFT IFSC — Funds, Bank Accounts and Insurance
Institutions in the GIFT IFSC offer three kinds of product that a resident may come across: fund schemes, foreign-currency bank accounts and foreign-currency life insurance. This lesson explains what each is, what they have in common, and what it leaves uncovered.
Three kinds of product, one currency feature
Fund schemes come from fund management entities, accounts and deposits from IFSC banking units, and life policies from IFSC insurance offices. All are regulated by the International Financial Services Centres Authority (IFSCA), and all are in foreign currency. A resident whose income and spending are in rupees therefore takes on exchange-rate risk with every one of them.
Fund schemes
Fund management entities registered with or authorised by IFSCA run schemes under the IFSCA (Fund Management) Regulations, 2025. The regulations provide for venture capital, restricted and retail schemes, each with its own investor conditions.
Venture capital schemes are filed as Category I alternative investment funds and have their own minimum per investor, which this lesson does not cover. Restricted schemes, also called non-retail schemes, are for accredited investors or for those investing at least USD 150,000, and may have up to 1,000 investors. Retail schemes are open to all, with no cap on the number of investors.
The USD 150,000 figure is often quoted as if it were the price of entry to GIFT City. It is the minimum for a restricted scheme only, not a general minimum for the IFSC.
Bank accounts
Since RBI's circular of 10 July 2024, a resident individual may open a foreign-currency account with an IFSC banking unit for all purposes permitted under the Liberalised Remittance Scheme (LRS). Money sent to the account counts towards the individual's annual LRS limit, and the other LRS conditions continue to apply. The conditions on deposits and idle balances are covered elsewhere in this world.
Life insurance
IFSC insurance offices issue life policies in which both the cover (the sum assured) and the premiums are in foreign currency. That is what distinguishes them from a policy issued in the domestic market.
For a resident, the rupee cost of each premium and the rupee value of the cover both move with the exchange rate, in either direction. Premium levels, benefits, how premiums are paid and the tax treatment depend on the individual policy and the law in force, and are not described here.
What is common, and what is not covered
All three are in foreign currency, so all three carry currency risk in both directions; funds carry market risk as well. Income and gains from IFSC funds and bank deposits stay subject to Indian tax under the normal rules for residents, and money a resident sends to buy fund units or to fund an account stays within the LRS limit of USD 250,000 per resident individual per financial year (as at October 2026). This lesson does not describe how life policies are taxed.
Rules at a glance
Reading the USD 150,000 figure correctly
Arjun, 45, an architect in Nagpur, is told that GIFT City needs USD 150,000. At an assumed rate of ₹85 per dollar, a made-up figure for this example, that is 150,000 × 85 = ₹1,27,50,000.
The statement is too broad. USD 150,000 is the minimum for one type of fund scheme, the restricted scheme, and accredited investors may invest in it without that minimum. A retail scheme is open to all investors, and the figure is not a general minimum for the IFSC.
Key points
- IFSC funds follow the IFSCA (Fund Management) Regulations, 2025 and come as venture capital, restricted (non-retail) and retail schemes.
- The USD 150,000 minimum belongs to restricted schemes; it is not a general minimum for the GIFT IFSC.
- Since 10 July 2024 a resident individual may open a foreign-currency account at an IFSC banking unit for all purposes permitted under LRS.
- Life policies from IFSC insurance offices have cover and premiums in foreign currency.
Common misunderstandings
- USD 150,000 is not the minimum for everything in the GIFT IFSC: it is the minimum for a restricted (non-retail) scheme.
- Foreign-currency cover is not automatically larger cover: its rupee value can fall as well as rise, and the rupee cost of premiums moves the same way.
- IFSC funds and deposits are not tax-free for a resident: income and gains stay taxable in India under the normal rules.
Questions people ask
Do SEBI's mutual fund rules govern fund schemes in the IFSC?
No. Schemes in the IFSC follow the IFSCA (Fund Management) Regulations, 2025. SEBI's regulations govern mutual funds and alternative investment funds set up in the domestic market.
Is there a cap on the number of investors in a retail scheme?
No. A retail scheme has no cap on investor numbers; a restricted scheme may have up to 1,000 investors.
For which purposes may a resident open an account at an IFSC banking unit?
For all purposes permitted under LRS, since RBI's circular of 10 July 2024.
What this lesson relies on
- IFSCA (Fund Management) Regulations, 2025
- RBI A.P. (DIR Series) circular of 10 July 2024 on foreign-currency accounts of resident individuals with IFSC banking units under LRS
- RBI — Liberalised Remittance Scheme (RBI FAQ on LRS)
- International Financial Services Centres Authority Act, 2019 (IFSCA as the single regulator in the IFSC)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.