GIFT City ETFs on foreign indices

Under India's liberalized remittance scheme (LRS), Indians can invest up to $250,000 abroad every year

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GIFT City's regulator International Financial Services Centres Authority remained unanswered.

Indians can freely buy ETFs tracking indices such as Nasdaq or Dow Jones from broking platforms. However, the central bank prevents mutual funds from collectively buying foreign stocks above $7 billion, with a sub-limit of $1 billion for buying ETFs. These limits were crossed three years ago, preventing MFs from buying more ETFs. This means the only such ETFs available for purchase are those from before 2022. The lack of new supply has raised the premium on such ETFs, and a new route holds the potential to access ETFs cheaper.