Indian investors ramp up overseas bets as US markets outperform, Pg15

Key Highlights:

• Indian residents' overseas investments surged by 54.50% to $1.959 billion between January and October 2025, compared to $1.268 billion in the same period last year.
• The Nasdaq Composite in the US has delivered approximately 21% return in 2025, while India's BSE Sensex gained a more modest 9.4%.
• The Liberalised Remittance Scheme (LRS) allows Indian residents to remit up to $250,000 per financial year for overseas investments.
• Foreign investors have withdrawn approximately Rs 86,960 crore (around $9.66 billion) from Indian markets in 2025.

Detailed Insights:

• The increase in overseas investment by Indian residents is attributed to the strong performance of US equities, renewed interest in technology stocks, and the desire for portfolio diversification.
• Indian retail investors often use fund-of-funds (FoF) structures to invest in US markets, which invest in underlying US mutual funds or ETFs tracking indices like the S&P 500 or Nasdaq.
• Direct investments in overseas equities are gaining popularity, particularly among affluent investors buying shares of global companies like Apple, Microsoft, and Amazon through Indian or overseas brokerage platforms.
• Investing in GIFT City in Ahmedabad is possible via purchasing Un-sponsored Depositary Receipts (UDRs) on the NSE IX or through platforms offering direct access via the India INX.
• Currency fluctuations, taxation on overseas income, and regulatory limits under the LRS framework pose potential risks to Indian investors.

Key Concepts Involved:

• Liberalised Remittance Scheme (LRS): A scheme by RBI allowing resident individuals to remit a specified amount of money abroad per financial year for investment and other purposes.
• Fund of Funds (FoF): A mutual fund scheme that invests in other mutual fund schemes instead of directly investing in stocks or bonds.
• Exchange Traded Fund (ETF): A type of investment fund that is traded on stock exchanges, similar to stocks, and typically tracks a specific index, sector, or commodity.