PPFAS Inbound GIFT Fund: What MFDs Need to Know (2026)
PPFAS is launching a set of inbound funds from GIFT City that let NRIs and foreign investors invest in its Indian strategies in USD. The first is Parag Parikh India Flexi Cap Fund, a feeder into Parag Parikh Flexi Cap Fund. Its NFO runs from 6 to 27 November 2026, with a USD 10,000 minimum and a 1.00% expense ratio. This guide covers that fund.
Why it matters for NRI investors
Parag Parikh Flexi Cap Fund is one of the most widely held equity funds in India and was the first active fund to cross ₹1 lakh crore in AUM. NRIs can already buy it directly, but that requires a PAN, an NRE or NRO account, rupee conversion, TDS on redemptions and usually an Indian tax return to claim refunds.
The GIFT City feeder removes these steps. Investors put in USD, redeem in USD, and get exposure to the same portfolio. Gains are exempt from Indian tax for non-residents.
Two other retail inbound funds, from Tata and Sundaram, are covered in our guide to GIFT City inbound retail funds.
Fund details
Detail | Parag Parikh India Flexi Cap Fund (GIFT City) |
|---|---|
Structure | Open-ended retail scheme under IFSCA (Fund Management) Regulations |
Fund manager entity | PPFAS Alternate Asset Managers IFSC Pvt Ltd |
Underlying (master) fund | Parag Parikh Flexi Cap Fund (Indian mutual fund) |
Who can invest | NRIs, OCIs, foreign individuals and institutions. Not resident Indians, US or Canada residents, or FATF blacklisted countries |
Currency | USD (investment, NAV and redemption) |
Unit class | Class B (Regular) |
Minimum investment | USD 10,000; top-up USD 1,000 |
Face value | USD 100 |
Expense ratio | 1.00% (fund) / 1.53% including the master fund's cost |
Distributor commission | 0.70% |
Exit load | 2% up to 365 days, 1% from 366 to 730 days, nil after 730 days |
Lock-in | None |
NAV and dealing | Daily; purchases and redemptions on all business days |
Trustee | Axis Trustee Services Ltd (GIFT City branch) |
Custodian and banker | Kotak Mahindra Bank |
Source: PPFAS GIFT fund page and the PPFAS GIFT presentation (October 2026).
Key dates
Milestone | Date |
|---|---|
Folio opening | Open since 12 October 2026 |
NFO opens | 6 November 2026 |
NFO closes | 27 November 2026 |
Reopens for ongoing purchases (tentative) | 7 December 2026 |
Folios can be opened before the NFO. Non-resident KYC can take a few days, so opening folios early avoids delays during the NFO window.
Onboarding and eligibility
NRIs: digital
NRIs can sign up through PPFAS's digital onboarding journey. It requires:
Aadhaar, with access to the linked mobile number for OTP
A CKYC number
The ability to remit money in USD (a USD account is not required)
Investors without a CKYC record are routed to a video in-person verification (VIPV) flow, where the PPFAS team verifies documents over video.
Foreign nationals and OCIs: offline
The digital journey is not yet open to foreign nationals, including OCI cardholders. They need to submit physical forms with documents notarised by their bank.
Funding the investment
Money is remitted in USD from the investor's bank account to the PPFAS GIFT account. Funds in an NRE or NRO account can also be used: the investor's Indian bank converts the rupees to USD, subject to regulatory limits, and remits them. This adds a currency conversion that an overseas remittance avoids.
Who is not accepted
Residents of the US and Canada
Residents of countries on the FATF blacklist
Residents of FATF grey-list countries can invest, but need additional documents
If an NRI becomes resident
An investor who becomes a resident Indian must redeem before the change in status. Since they are still non-resident at redemption, there is no capital gains tax in India. Proceeds can be paid in USD to an overseas account or in rupees to an Indian account. The exit load still applies if this happens within two years of investing.
Structure
The GIFT City fund is a passive feeder. It pools USD from investors and invests in Parag Parikh Flexi Cap Fund in India.
The offer document allows the feeder to hold 90-100% in the master fund and up to 10% in deposits and liquid instruments. PPFAS intends to keep more than 99% in the master fund. The buffer covers large inflows that can't be deployed immediately, for example on Indian market holidays.
The master fund can hold 65-100% in Indian equity and up to 35% in foreign stocks, so investors get PPFAS's full strategy, including its overseas holdings. Fresh overseas investment by Indian funds has been capped at the headroom available as of 1 February 2022, which limits how much the foreign portion can grow.
Costs and distributor commission
The fund's expense ratio is 1.00%. Including the master fund's cost, the total is 1.53% a year. Distributor commission is 0.70%.
PPFAS's simulated USD returns (below) deduct 30 bps for the feeder. Since the actual Class B expense ratio is 1.00%, real returns would be about 0.7 percentage points a year lower than the simulation.
Performance in USD
Simulated returns, based on the master fund's actual history converted to USD, less 30 bps:
Period (to 31 Aug 2026) | Fund (simulated) | Nifty 500 TRI | Nifty 50 TRI |
|---|---|---|---|
Since inception (May 2013) | 13.78% | 9.76% | 8.06% |
Last 10 years | 12.99% | 9.40% | 8.09% |
Last 5 years | 6.65% | 5.37% | 2.71% |
Last 3 years | 8.76% | 7.45% | 4.02% |
Last 1 year | -8.28% | -3.66% | -8.60% |
USD 10,000 invested at inception would be about USD 53,534, against USD 33,571 in the Nifty 500 TRI.
USD vs rupee returns. The master fund's 10-year rolling returns in rupees have ranged from 17.23% to 21.48%. The 10-year USD return is 12.99%. The difference is mainly the rupee's depreciation against the USD.
Recent performance. Over the last year, the fund returned -8.28% in USD, against -3.66% for the Nifty 500 TRI.
Downside capture. Over 10 years, Morningstar data in the presentation shows a downside capture ratio of 49, against a category average of 91. The maximum drawdown was -23.13%, in early 2020.
GIFT City fund vs Indian mutual fund for NRIs
Indian mutual fund | GIFT City inbound fund | |
|---|---|---|
PAN | Mandatory | Not required |
Bank account | NRE or NRO needed | Not needed; remit USD from abroad |
Currency | Converted to rupees, with forex costs both ways | Stays in USD |
Capital gains tax in India | 20% short term, 12.5% long term above ₹1.25 lakh (FY 2026-27) | Exempt under Section 10(4D) |
TDS on redemption | Yes | No |
Indian tax return | Usually needed to claim refunds | Not required |
Repatriation | Limits on NRO funds | No restriction |
Foreign nationals | Need FPI registration | Can invest directly |
Minimum | ₹1,000 or less | USD 10,000 |
The tax difference is largest for NRIs in countries that don't tax capital gains, such as the UAE. Investors in countries that do tax gains still avoid TDS and Indian tax filing. Investors may owe tax in their country of residence.
The direct route remains better for smaller amounts, SIPs, and investors who already hold Indian bank accounts and file Indian returns.
Suitability
Suited to:
NRIs in low or zero-tax jurisdictions with USD 10,000 or more to invest
Foreign nationals and OCIs who want Indian equity exposure without FPI registration
NRIs who currently file Indian returns only to reclaim TDS
Not suited to:
US and Canada residents, who are not accepted
NRIs planning to return to India within two years, given the exit load on mandatory redemption
Money needed within three years
More on GIFT City: GIFT City guide for distributors and NRI's guide to GIFT City.
Q: Who can invest in Parag Parikh India Flexi Cap Fund in GIFT City?
A: NRIs, OCI cardholders, foreign individuals and foreign institutions can invest. Resident Indians, residents of the US and Canada, and residents of FATF blacklisted countries cannot. Residents of FATF grey-list countries need additional documents.
Q: What is the minimum investment in the PPFAS GIFT City fund?
A: The minimum initial investment is USD 10,000. Additional investments start at USD 1,000.
Q: What is the expense ratio and distributor commission?
A: The fund's expense ratio is 1.00% for Class B (Regular). Including the master fund's cost, the total is 1.53% a year. The distributor commission is 0.70%.
Q: When is the NFO for Parag Parikh India Flexi Cap Fund?
A: The NFO opens on 6 November 2026 and closes on 27 November 2026. The fund is expected to reopen for ongoing investment on 7 December 2026. Folio opening started on 12 October 2026.
Q: Is the PPFAS GIFT City fund tax-free for NRIs?
A: Gains on units of IFSC funds are exempt from Indian tax for non-residents under Section 10(4D), and there is no TDS on redemption. The investor may still owe tax in their country of residence.
Q: Do NRIs need a PAN or NRE account to invest?
A: No. PAN is not mandatory, and no NRE or NRO account is required. Investments and redemptions are in USD from an overseas bank account. For the digital journey, NRIs need Aadhaar with its linked mobile number and a CKYC number.
Q: Can NRIs invest from an NRE or NRO account?
A: Yes. The client's bank converts the rupees to USD, subject to regulatory limits, and sends them to the PPFAS GIFT account. Investing from an overseas USD account avoids the conversion.
Q: What happens if an NRI investor becomes a resident Indian?
A: They must redeem before becoming resident. Since they are still non-resident at redemption, there is no capital gains tax in India. Proceeds can be paid in USD to an overseas account or in rupees to an Indian account.
Q: Is it the same portfolio as Parag Parikh Flexi Cap Fund in India?
A: Yes. The GIFT City fund is a feeder that keeps more than 99% in Parag Parikh Flexi Cap Fund, with a small buffer for flows that can't be invested the same day.
If you want to bring GIFT City funds to your NRI clients without the paperwork headache, take a look at what Creso offers for MFDs.
