Indians Tap into Wealth Through Overseas Assets

India's wealthy are increasingly exploring investment opportunities beyond domestic markets, driven by the dual motivations of maximizing returns and diversifying portfolios.

- AARTHI RAMAKRISHNAN

The Liberalised Remittance Scheme (LRS), AIF (Alternative Investment Fund) structures at GIFT City, and the concept of accredited investors are all opening new doors for Indian investors to diversify their wealth, broaden their global reach, and potentially access more stable returns.

Rising appetite With the LRS introduced in 2004, Indian residents can remit up to $250,000 annually for a variety of capital and current account transactions, including investments in foreign securities and real estate. Thus, Indian interest in overseas investments has surged.

According to The Wealth Index Report by 360 ONE Wealth, transfers for deposits, property acquisitions, and investments in equities and bonds reached $2.45 billion in 2022-23, reflecting a compound annual growth rate (CAGR) of 26% since 2018-19. Of these, equities and debt securities formed the largest category, boasting a 31% CAGR. A distinct appeal of these overseas investments is their potential to enhance portfolio diversification. With Indian equity markets showing a positive but relatively low correlation to global equities, investments in developed markets provide a buffer against domestic market volatility.