Indian investors are increasingly diversifying their portfolios by venturing into US stock markets, with equity investments through the Liberalized Remittance Scheme (LRS), even as overseas investments through mutual funds schemes remain frozen for last two years.
“Overseas remittances specifically for equity and debt investments have surged 78 per cent, with total remittances reaching $8.37 billion in 2024,” notes Shlok Srivastav, Co-founder and COO of Appreciate, a fintech company facilitating cross-border investments. “These aren’t just statistics; they represent a sea change in investment philosophy among Indian investors.”
Geographical diversification
This shift comes as Indian investors seek geographical diversification amid fluctuating domestic market performance. The movement towards US markets has been particularly pronounced as investors capitalize on what appears to be a continuing bull run in American equities.
“US Markets, on the other end, if you look at the typical trend, their bull runs last for on an average of five and a half years. And the current bull run has been two years, which means we could possibly expect another three and a half years of a great bull run,” explains Srivastav.
The rupee’s steady depreciation against the dollar—from ₹74.5 in January 2022 to ₹87.39 in March 2025—has provided additional incentive, effectively giving Indian investors an extra 3-4 per cent annual return on their US investments.
Strategic targeting
Sector preferences among Indian investors reveal strategic targeting of industries underrepresented in domestic markets. Technology-driven sectors, particularly AI, semiconductors, and biotechnology, are drawing substantial interest. Defence is emerging as another key focus area, with projections of approximately $1 trillion in US spending next year.
“We’re seeing a significant shift in where Indian investors are placing their capital, with strong interest in technology-driven sectors that may be underrepresented in domestic markets,” Srivastav observes.
Recent market corrections have created buying opportunities in previously high-flying stocks. “The US market underwent a correction recently where not just the Magnificent 7 but others also dipped on the back of policy changes. Investors have been using this opportunity recently to invest in these companies including Nvidia and others which dipped significantly from its high last year,” Srivastav points out.
Despite the growing interest, barriers to overseas investment have historically included high ticket sizes, costly remittance processes, and cumbersome transaction journeys. Appreciate, founded in 2019, aims to address these challenges through a digital platform integrated with banking partners.
Appreciate focuses primarily on US markets, which account for approximately 80 per cent of current demand, though it offers exposure to other markets through ETFs and ADRs. The company is also exploring the addition of other exchanges, with the Hong Kong Stock Exchange under consideration.
In 2023, SEBI had frozen MF schemes’ investment in overseas stocks as they had hit the overall cap of $7 billion fixed by RBI.
With overseas mutual fund schemes was frozen by SEBI for the last two years, retail investors have increasingly turned to direct stock investments through the Liberalized Remittance Scheme.
Tanmay Shah, Managing Director of stock broking firm SIHL said the inability of many retail investors to gauge market dynamics such as global policy changes, economic shifts and market trends add significant risk to their overseas investments.
On the other hand, MFs offer a more disciplined approach to global investing professional fund managers with specialised expertise and backed by continuous research, he said.
Subho Moulik, Founder & CEO, Appreciate
This article was first published on The Hindu Business Line
