India's mutual fund industry has hit the cap on investing overseas. But individual investors have an alternative route that could be just as effective for diversifying their investment portfolios.
The article from Livemint discusses the benefits and considerations of international investing for Indian investors. It highlights how global diversification can reduce risk and potentially enhance returns by not putting all investment eggs in one basket, particularly in the Indian market. The piece explains the use of the Liberalised Remittance Scheme (LRS) which allows Indian residents to invest up to $250,000 annually abroad, though this comes with a 20% Tax Collected at Source (TCS) on investments over Rs 7 lakh. It also touches on the complexities of managing international investments, including currency risk, regulatory differences, and the need for expert portfolio management services (PMS) to navigate these waters effectively. The article suggests that while international investing can offer significant advantages like exposure to global growth sectors and currency diversification, it requires careful planning around tax implications, investment limits, and understanding of foreign markets.
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