Indian fund houses, Mirae and Tata eye global plays as GIFT City opens new doors for retail investors and cross-border themes
In a push to expand global investment access for Indian investors, Mirae Asset Investment Managers (India) and Tata Asset Management are preparing to launch retail mutual fund schemes from the Gujarat International Finance Tec-City (GIFT IFSC). These initiatives come as regulatory changes and tax incentives make the financial hub more attractive to fund houses.
Mirae Asset's proposed offerings will focus on underrepresented sectors in Indian equity markets. "There are not many listed companies in these sectors [in India], so the investors may diversify through the GIFT City route," said Vaibhav Shah, Head – Products, Business Strategy & International Business at Mirae Asset Investment Managers (India), referring to themes like semiconductors and artificial intelligence.
Vaibhav Shah, Head - Products, Business Strategy & International Business, Mirae Asset Investment Managers (India), while speaking with Outlook Money said, "We hope to launch a Retail Mutual Fund via GiFT City in the next 2-3 months, subject to regulatory approvals."
"The ticket size we will be looking at is either $5,000 or $10,000. This is because LRS transfer costs are involved. The idea is to launch a fund with country and theme exposure currently not available to Indian investors so that investors can invest in the best global innovative companies and funds," Shah added.
"If the ticket size is too small, then the currency conversion transfer cost as a percentage of the investment amount becomes large, which will eat into the investors' returns," Shah added.
Alongside Mirae, Tata Asset Management has also got the green nod from the International Financial Services Centres Authority (IFSCA) to begin operations at GIFT City as a Registered Fund Management Entity (Retail). According to the company, its presence in GIFT City will "play a pivotal role in strengthening the company's offshore product portfolio and enhancing its investment offerings for international clients."
These schemes are expected to target both non-resident Indians (NRIs) and Indian residents looking to utilize their annual Liberalised Remittance Scheme (LRS) limit of $250,000. So far, over 9,000 NRI retail accounts have been opened at GIFT City's banking units, signaling strong demand for equity-based investment alternatives.
According to Business Standard, Mirae and Tata are among at least five fund houses planning retail-focused launches from GIFT City. The shift comes after the IFSCA lowered the minimum corpus requirement for retail schemes from $5 million to $3 million, lowering the entry barrier for fund houses. Additional tax benefits, such as exemptions on capital gains and a 10% tax on dividends and interest income, further sweeten the proposition.
With domestic mutual funds hitting their $7 billion cap for overseas equities, the GIFT City route is emerging as a critical alternative for fund houses and investors looking beyond India's borders.