Dollar Insurance Gains Traction at GIFT City
Policybazaar’s offshore arm sees 50% NRI share
Tax-free maturity and DTAA drive global demand
By Legal Reporter
New Delhi: April 28, 2026:
Policybazaar’s GIFT City arm has quickly become a magnet for NRI investors, with over 50% of its premium base now coming from overseas customers—primarily in the US, UAE, and UK—thanks to tax exemptions under Section 10(10D) and the International Financial Services Centres Authority (IFSCA) framework
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Key Legal and Regulatory Highlights
- IFSCA Framework
- GIFT City operates under the International Financial Services Centres Authority (IFSCA), a unified regulator distinct from domestic Indian regulators.
- Enables NRIs to access US dollar-denominated insurance-linked investment products.
- Income Tax Act – Section 10(10D)
- Provides tax-free maturity proceeds for qualifying insurance policies issued via IFSC.
- Premium condition: must not exceed 10% of the sum assured.
- Double Taxation Avoidance Agreements (DTAA)
- Protects NRIs from being taxed twice—once in India and again in their country of residence.
- Enhances net returns and compliance ease.
- Digital Access Rules
- NRIs can invest directly through NRE or overseas bank accounts.
- Remote KYC and digital onboarding eliminate physical presence requirements.
- Policies allow partial withdrawals and flexible premium payments.
Analytical Perspective
Policybazaar’s expansion into GIFT City in September 2025 has demonstrated how India’s IFSC framework can rival offshore hubs like Dubai or Singapore. By offering USD-denominated insurance products with tax-free maturity, GIFT City is positioning itself as a global wealth hub.
The concentration of customers from the US (30%), UAE (25%), and UK (10%) shows how diaspora-heavy regions are driving demand. Younger NRIs (28–45 age group) are particularly active, reflecting a digitally savvy investor base seeking diversification and dollar exposure.
This legal architecture not only attracts foreign currency inflows but also strengthens India’s ambition to make GIFT City a global financial powerhouse.
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FAQ: Legal Points Simplified
Q1. What is the role of IFSCA in GIFT City?
IFSCA is the unified regulator for GIFT City, ensuring NRIs can access international financial products under a distinct legal framework.
Q2. What tax benefits apply to insurance-linked investments?
Under Section 10(10D), maturity proceeds of eligible policies issued via IFSC are fully tax-exempt, provided premiums do not exceed 10% of the sum assured.
Q3. How does DTAA benefit NRIs?
DTAA prevents double taxation, ensuring NRIs are not taxed both in India and their country of residence.
Q4. Can NRIs invest without being physically present in India?
Yes. Investments can be made digitally using NRE or overseas bank accounts, with remote KYC and onboarding.
Q5. Are investments limited to insurance products?
No. NRIs can also access international funds, gold ETFs, and silver ETFs through GIFT City.
Q6. What investor profile dominates GIFT City’s NRI base?
Nearly two-thirds of customers are aged 28–45, highlighting strong participation from younger, globally mobile professionals.
Conclusion
Policybazaar’s GIFT City arm illustrates how legal reforms, tax exemptions, and digital access are reshaping NRI investment strategies. With Section 10(10D) exemptions, DTAA protection, and IFSCA’s unified oversight, GIFT City is emerging as a regulated, tax-efficient gateway for global wealth creation.
For NRIs, this means a unique opportunity to diversify into dollar-denominated insurance and investment products while enjoying tax-free benefits and seamless compliance. GIFT City is no longer just an experiment—it is fast becoming India’s answer to international financial hubs.