What should an investor verify first?

Which specific route — mainland AIF or GIFT City fund — fits their tax residency and repatriation needs.

Which documents matter most?

FEMA-compliant account documentation (NRO/NRE) or GIFT City banking channel setup, depending on the route.

What is the main downside to test?

Choosing a route based on ease of setup rather than long-term tax and repatriation fit.

How should the final decision be made?

Confirm tax treatment in both India and the country of residence with advisers in both jurisdictions.

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How NRIs Can Invest in Indian Private Markets

Janvi Bhalla1 min read

Understanding the Cross-Border Structure

NRIs can invest in Indian private markets through several routes: mainland Indian AIFs (via NRO or NRE accounts, subject to FEMA rules), GIFT City-domiciled funds (denominated in foreign currency, routed through banking channels outside India's domestic banking system), or direct unlisted-share purchases under specific FEMA provisions.

Reading Currency, Tax and Repatriation Together

The specific route chosen determines currency exposure, documentation requirements, tax treatment, and eventual repatriation mechanics — these are not interchangeable, and the right choice depends on the investor's specific country of residence, existing banking setup, and preference for INR versus foreign-currency exposure.

Where NRI Execution Breaks

The common failure is choosing a route based on which is easiest to set up rather than which actually fits the investor's tax residency and long-term repatriation needs. A route that seems simpler upfront can create meaningfully more friction and cost when it's time to bring proceeds back to the country of residence.

Making the Investment Decision

Before committing, work with advisers in both India and the country of residence to confirm: which specific route (mainland or GIFT City) fits the investor's situation; the applicable tax treatment in both jurisdictions; and the realistic repatriation mechanics and timeline for that specific route.

The right NRI investment route is the one that fits the investor's specific tax residency and long-term repatriation plan — not necessarily the one that's easiest to set up today.

Key takeaways

NRIs can access Indian private markets via mainland AIFs, GIFT City funds, or direct unlisted-share purchases.
The specific route chosen determines currency exposure, documentation, tax treatment, and repatriation mechanics.
A route that's easiest to set up isn't always the one that fits long-term repatriation needs best.
Confirm tax treatment in both India and the country of residence before committing to a specific route.

More in NRI Private-Market Investing

Continue with the other chapters in this module.

NRI Private-Market InvestingNRI Investment in Indian AIFsNRI investment in a mainland Indian AIF follows the same SEBI regulatory framework as a resident investor's, but with additional FEMA compliance layered on top — the source account (NRO or NRE),...NRI Private-Market InvestingGIFT City AIFs for NRIsGIFT City (Gujarat International Finance Tec-City) AIFs are domiciled in India's international financial services centre and typically denominated in foreign currency (commonly USD), allowing NRI...NRI Private-Market InvestingMainland AIF vs GIFT City AIFA mainland AIF invests and reports in INR, requires NRO or NRE account routing, and follows standard SEBI AIF regulations.