A few years ago, several Indian mutual fund houses launched schemes that invested in overseas markets.

Many of them tracked well-known US indices like the S&P 500 or the Nasdaq 100. For Indian investors, this became one of the simplest ways to gain exposure to global companies.

You could invest through a familiar mutual fund platform and indirectly own businesses like Apple, Microsoft, Amazon, and Alphabet.

Naturally, these funds became popular.

The idea of participating in the growth of global companies through a domestic mutual fund structure appealed to many investors. Money started flowing into these schemes steadily.

But there was a structural constraint in the background.

The Reserve Bank of India had placed a limit on how much the Indian mutual fund industry could collectively invest overseas.

At the time this limit was introduced, the industry-wide cap was USD 7 billion. Within that, each individual fund house could invest up to USD 1 billion abroad (explained this in earlier chapters, too).

These limits were not specific to any one scheme. They applied across the entire mutual fund industry.

As international funds kept attracting inflows, fund houses slowly started reaching those limits.

Once a fund house exhausted its overseas investment capacity, it could no longer accept new money into those international schemes. One by one, several well-known global mutual funds stopped taking fresh investments.

Investors who discovered these funds later often found that subscriptions were temporarily closed.

GIFT City funds operate under a different regulatory structure.

Funds set up inside GIFT City are regulated by IFSCA, not by SEBI. Because of this, they do not fall under the same overseas investment limits that apply to the domestic mutual fund industry.

In practical terms, this means that a fund operating from GIFT City can continue accepting fresh investments even when similar international funds in India have stopped doing so.

That difference explains why, at a time when many familiar international mutual funds remain closed to new investors, several GIFT City funds have stayed open.

Availability, however, is only one part of the story.