Satinder Aggarwal highlights what Indian investors diversifying into equities, ETFs, and real estate abroad to manage risk, returns, and currency exposure must watch out for.
Indian investors have gradually expanded their horizons outside of their home markets in recent years.
In April 2025, investments in foreign debt and equity instruments surged past $200 million (roughly Rs 1,746 crore), more than doubling the amount recorded in the same month in the year prior.
This was a startling statistic. Whether in Tier 1 cities or smaller towns, the typical Indian portfolio has historically been based on domestic stocks, bank deposits, gold, and real estate. These asset classes still have a significant impact, but the recent change reflects a growing understanding that diversifying risk, expanding opportunities, and strengthening a portfolio can all be achieved by including international exposure.
Why Indian Investors Are Diversifying Abroad
Several structural reasons are driving this shift
Around the world, economies go through various stages of the cycle at various points in time. Indian investors are less exposed to the volatility of any given market by propagating their money across various geographical areas.
How Indians Can Invest Abroad
Acknowledging the necessity of global exposure is just the initial step. For the majority of investors, the more pragmatic query is: How does one go about making foreign investments?
The Reserve Bank of India's Liberalised Remittance Scheme (LRS), which permits residents to remit up to $250,000 for approved purposes each fiscal year (April-March), holds the key to the solution.
Within this limit, investors can:
Vitally, dividends, interest, or rental income from these foreign assets can be preserved and reinvested overseas. The sole requirement is that any foreign currency that has not been utilised must be returned within 180 days.
However, RBI guidelines continue to strictly prohibit activities like margin trading, leveraged forex bets, and transactions involving high-risk jurisdictions.
The Role of GIFT City
In addition to LRS, another significant channel has surfaced: Gujarat's International Financial Services Centre (GIFT City) (IFSC).
GIFT City, which is governed by the International Financial Services Centres Authority (IFSCA), a single regulator, permits foreign exchange transactions and provides tax savings and streamlined compliance
For Indian investors, its appeal lies in:
Where Is the Capital Flowing?
Despite the fact that retail participation in international markets is still growing, some clear trends can be seen:
The Way Forward
Global investing is no longer an exclusive niche for India's ultra-wealthy. It is turning into a rational tactic for people looking for stability and long-term development. However, there are tax, cost, and compliance considerations for each route, which illustrates the significance of careful planning.
When approached carefully, international investments give Indian investors more ways to compound returns, more currencies to earn in, and greater resilience against domestic market swings. In short, global diversification is not just a trend; it is steadily becoming an integral part of the modern Indian portfolio.
Global investment platforms play a crucial role in simplifying international diversification. By offering seamless and secure interfaces with single-view access to global markets, these platforms make cross-border investing far more practical.
Satinder Aggarwal is CEO and Founder of EQBAC.
Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this article to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.