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Saurabh Mukherjea is not the kind of fund manager who hedges his bets with careful language. The founder of Marcellus Investment Managers, one of India’s more closely watched boutique fund houses, has made a career of saying out loud what others whisper.
His latest vehicle for that is a book—Breakpoint: The Crisis of the Middle Class and the Future of Work, published by Juggernaut in March 2026 and co-written with economist Nandita Rajhansa and human resources professional Sapana Bhavsar.
“I have argued in my book that India is not creating enough jobs for the middle and lower income segments,” he said. “This would mean that the opportunity to invest in Indian businesses will come down over the next several years. The investment in overseas stocks and businesses offers a good hedge.”
Marcellus has already set up a fund in GIFT City—Gujarat International Finance Tec-City—the somewhat grandly named financial hub near Gandhinagar. And it is about to launch a second one. The corpus so far: roughly ₹1,000 crore, all of it aimed at international markets.
Mirae Asset has a GIFT City fund, too. So does DSP Investment Managers. More are coming.
GIFT City, it turns out, has found a second purpose. And it’s a rather more exciting one than what it was originally built for.
To understand what’s happening in the financial hub today, you need to go back to why it was built at all.
When Narendra Modi, then the chief minister of Gujarat, first sketched out the idea in 2007, the pitch was straightforward. India had a problem: the rupee was not freely convertible, meaning foreign capital couldn’t move in and out without bumping into a wall of regulations. If India wanted the trappings of a global financial centre—offshore banking, aircraft leasing, international insurance, global trading desks—it needed a workaround. GIFT City was that workaround: a designated zone on Indian soil where a version of currency convertibility would be allowed, enough to let businesses transact in dollars without the usual red tape.
For most of the years since, GIFT City was described as a potential rival to Singapore or Dubai. The potential, however, remained stubbornly potential. The hub got its towers, its roads, its regulated zone. But the buzz of a genuine financial hub—the kind you feel when you walk into a trading floor in Hong Kong or step out into lower Manhattan—was harder to manufacture.
What changed things was a shift nobody had quite planned for. Instead of being the place where foreign money came in, Gift City is increasingly becoming the place where Indian money goes out. The pivot, as fund managers now describe it, is from inbound capital to outbound investing.
For years, ordinary Indians wanting to invest in global markets—in Apple, in Nvidia, in a commodities fund— had two legitimate options, both with serious limitations. The first was the Liberalised Remittance Scheme, or LRS, which lets every Indian resident send up to $250,000 abroad each year for investment. The second was feeder funds—India-domiciled funds that route money into offshore funds. But market regulator Sebi put a collective cap of $7 billion on these, and that cap has been hit. The door is, for practical purposes, closed.
GIFT City is now the opening that neither route provided. Fund managers can set up international mutual funds, portfolio management services, and alternative investment funds (AIFs) right there, regulated by the International Financial Services Centres Authority (Ifsca) and accessible to Indian investors through LRS. The structures are international, but the address is Indian.
“What Gift City does is ease the way ordinary Indian investors can buy overseas stocks,” said Pramod Gubbi, who co-founded Marcellus. “These are still early days, and we are already seeing a lot of activity.”
One of the more unusual things about Gift City right now is that the regulator, Ifsca, set up in 2020, appears to be actively trying to make things work, rather than creating obstacles.
Before, the regulatory picture was messy. Multiple authorities had jurisdiction over different parts of GIFT City’s financial activity—the RBI over banking, Sebi over the securities markets, the insurance regulator over insurance. Ifsca consolidated all of this into one body and has since moved to simplify product rules, streamline onboarding (now fully digital), and attract fund managers who had been watching from a cautious distance.
The most significant recent change is the introduction of tax residency certificates by Ifsca. These certificates, issued to entities registered in GIFT City, are now accepted by Indian tax authorities as proof of tax residence. For years, the absence of this clarity had been a nagging anxiety. If you set up a fund in GIFT City and made money, would Indian authorities take a second bite at profits already taxed under GIFT City rules? That grey area is now largely resolved.
There’s another tax incentive aimed at foreign investors. Under GIFT City rules, non-resident investors, including non-resident Indians (NRIs), do not pay tax on profits made through GIFT City-domiciled funds. This is meaningful for Gulf NRIs in particular, who represent a large and largely untapped pool of investable savings. Setting up an investment account in New York or London is cumbersome if you live in Dubai or Riyadh. GIFT City, with its Ifsca regulation and familiar legal language, offers a simpler alternative.
Chitra Iyer, chief executive officer (CEO) of MFA, a Mumbai wealth management firm serving HNIs and women clients, is already preparing to make the jump. “We are all set to take advantage of the GIFT City setup for outbound investments, especially through the ODI (Overseas Direct Investment) route,” she said. “Even though there are significant initial regulatory requirements—having an office there, having some compliance staff—we can see good prospects going forward.”
The costs of setting up in GIFT City are a fraction of what a comparable operation would cost in Singapore or New York. That cost advantage, fund managers say, is real and structural.
Walk through the list of fund houses in GIFT City and a picture emerges: the activity is real, accelerating, and no longer limited to the largest players.
Mirae Asset, the Korean-origin fund house with a large Indian business, got in early with a fund targeting global equities. DSP Investment Managers followed. Marcellus, with its ₹1,000 crore corpus, has made GIFT City a central part of its business pitch.
Two fund structures are allowed under GIFT City rules. AIFs carry a minimum ticket size of $150,000, making them the preserve of wealthy investors. But retail mutual fund structures have no minimum floor—and that is where the longer-term mass-market opportunity lies.
“Indians are increasingly wanting to diversify globally because of rupee depreciation, and access to global themes like artificial intelligence (AI), semiconductors, defence, blockchain, data centres and rare earths—areas that simply don’t have listed companies in India,” said Vaibhav Shah, who heads business development and international sales at Mirae Asset India.
The distributor community has been paying attention. Prem Khatri runs CafeMutual, an advisory platform for the mutual fund industry. His event series ‘Beyond Borders’ drew over 235 distributors in Mumbai and more than 200 in Bengaluru.
“RBI (Reserve Bank of India) data shows that outward remittances under LRS have grown nearly 25 times over the past decade,” Khatri said. “South Korea’s Kospi delivered over 100% returns in a year. Japan’s Nikkei and Brazil’s Bovespa generated returns exceeding 45%. In contrast, India’s Nifty has delivered around 4% over the last year.”
In absolute terms, equity and debt investments under LRS have grown fourfold, reaching $1.69 billion in fiscal year 2025 (FY25), according to RBI data.
Here is something that rarely gets said bluntly in conversations about Indian equity markets: the Indian market, for all its depth and liquidity, is quite a narrow one.
Look at what dominates India’s listed universe. Financials. Consumer staples. Information technology (IT) services—think TCS, Infosys, Wipro, HCL. These are excellent companies, but they provide services to the West rather than making the products reshaping the global economy. India has no equivalent of Nvidia, which designs the chips that power AI. No Rio Tinto, which mines the copper and lithium the energy transition needs. No listed data centre company of scale. No global biotech or defence prime.
Somnath Mukherjee, managing director and chief strategist at ASK Wealth Advisors, puts it plainly: “Sectors like commodities and evolving areas like data centres are simply not in the portfolio of Indian investors.”
His prescription is startlingly ambitious—at least half of any Indian portfolio, he argues, should be in overseas markets. “The last two years of non-performance of domestic markets, combined with the fact that India just accounts for 2% of the MSCI Index, makes a very strong case for diversification,” he said.
The analyst community stands to benefit too. Nirmal Bari, director and principal officer at PPFAS Alternate Asset Managers in GIFT City, makes the point well. “An analyst tracking the Indian IT sector today will also have to track global IT companies like Accenture or Cognizant. Similarly, as an auto analyst, you would want to understand what is happening at companies like Tesla.”
The talent is already there, he argues—GIFT City simply gives it a formal home and a bigger mandate.
There is also a business opportunity for India’s mutual fund industry that doesn’t get spoken about enough. The domestic market is crowded—50-odd asset management companies chasing the same pool of investors and the same universe of stocks. GIFT City opens an entirely new product category. That’s not a marginal opportunity. It’s a new business.
This is the part where optimism gets stress-tested.
For all the regulatory progress and genuine investor interest, the GIFT City investing journey for an ordinary Indian is still not smooth. An investor in Mumbai wanting to put money into a Marcellus GIFT City fund must first instruct their bank to transfer money abroad under LRS. In practice, many banks still require additional paperwork, approvals, and sometimes a branch visit—not the one-click experience domestic SIPs (Systematic Investment Plans) have become. Once transferred, the money takes up to two working days to land in the GIFT City account. Domestic transactions are instantaneous.
There’s another wrinkle. When you send money abroad under LRS, the government deducts a 20% tax collected at source, or TCS. The refund process can take nine to twelve months. “This blocks 20% of funds and impacts returns, since investing depends on efficient cash flow usage,” said Vaibhav Shah of Mirae.
There is also a structural tax disadvantage for Indian investors. While non-resident investors avoid capital gains tax on trades within a GIFT City fund, Indian investors are taxed on every churn inside the fund—reducing the corpus available to compound. In contrast, domestic mutual funds follow a pass-through structure where capital gains are levied only when the investor redeems units.
Sachin Sawrikar, managing partner at Artha Bharat Investment Managers IFSC, says this has led many funds to adopt feeder-master structures, where a GIFT City fund feeds into a global fund where gains are not taxed on every trade.
Nonetheless, Khatri of CafeMutual is sanguine. “It will all boil down to whether investors make money from overseas investment. If there are early successes, more investors will come in and so will more fund houses. Right now, the ease of doing business is still a work in progress.”
Only the top 1-2% of the population currently uses LRS for market investments, according to Mukherjee of ASK. Getting the next layer—the top 10-15% of households—requires product simplicity, distribution reach, investor education, and above all, a run of good returns from global markets.
That last variable is the one nobody can control. But the rest—the regulation, the products, the distribution infrastructure—is coming together in GIFT City in ways that weren’t true even three years ago.
T. Surendar is a senior journalist at Mint with nearly three decades of experience covering business, markets, and corporate India. Since beginning his career in 1996, he has built a reputation for insight-driven reporting on corporate strategy, with a particular focus on India’s large, family-owned businesses and their evolution.<br><br>At Mint, he writes on corporate strategy, market trends, and regulatory developments, bringing depth and clarity to complex business stories. Over the years, he has worked with leading publications including India Today and Businessworld, and was part of the founding editorial teams of Forbes India and Fortune India. Most recently, he served as managing editor at The Morning Context, where he led long-form and investigative journalism.<br><br>Earlier in his career, Surendar served as national business features editor at The Times of India, India’s largest-circulated English daily, where he broke several important stories, including the one on the Apollo Hospitals chain losing out on their Sri Lankan venture and the guar gum trading scam.<br><br>Prior to his journalism career, Surendar worked across the pharmaceutical, industrial automation, and diamond jewellery sectors, and also as an equity analyst—experience that informs his nuanced understanding of corporate strategy and markets.<br><br>Surendar is known for breaking trend-defining stories and producing authoritative explainers on key corporate developments, including succession planning at Reliance Industries. He has interviewed some of India’s most influential business leaders, including Mukesh Ambani, Ratan Tata, Kumar Mangalam Birla, Anand Mahindra, and Dilip Shanghvi.<br><br>A Chevening Scholar in Journalism, he completed a specialised programme at the University of Westminster, and has also undergone a Newsroom Leadership Program conducted by Columbia University. He holds a bachelor’s degree in mathematics and has taught journalism courses at the University of Mumbai.<br><br>He has moderated and conducted high-profile discussions at forums such as Fortune India’s Most Powerful Women event. His work is defined by rigour, independence, and a commitment to helping readers understand the strategic forces shaping corporate India.
Srushti is a markets reporter at Mint. She writes on equity markets, and her areas of coverage range from brokers and exchanges to mutual funds and the fast-evolving alternatives space, including GIFT City, from the financial capital of India. She has an experience of over three years in journalism, and has previously worked at Moneycontrol. She has an undergraduate degree in mass communication and a postgraduate diploma in business and financial journalism from Asian College of Journalism, Chennai.<br><br>Srushti prefers meeting people from the industry over making calls. Her work aims to drive impact—her story on illegal gold imports, for instance, caught the government’s attention and contributed to a policy shift. She specialises in turning complex market data into clear, engaging stories so even her grandmother could understand futures and options.<br><br>Outside of the newsroom, she enjoys spending money on jewellery and watching thriller films—especially the kind that keep her awake at night. She spends 1.5 hours a day commuting in Mumbai locals, listening to horror podcasts on her way to work. She’s also very talkative—so reach out only if you have lots of time.