In an era marked by global market fluctuations and increasingly sophisticated investment strategies, Indian wealth global diversification has emerged as a defining trend among the country’s affluent class. From leveraging the Liberalised Remittance Scheme (LRS) to engaging with cutting-edge financial structures at GIFT City, and seeking opportunities as accredited investors, wealthy Indians are breaking boundaries in pursuit of robust, globally balanced portfolios.
Rising Appetite for Overseas Investments
Introduced in 2004, the Liberalised Remittance Scheme (LRS) has significantly widened the horizons for Indian residents, permitting annual remittances of up to USD 250,000 per individual for various investments, including foreign equities, property, and debt instruments. According to the latest Wealth Index Report by 360 ONE Wealth, outward remittances touched $2.45 billion in FY2022- 23, growing at an impressive 26% CAGR since FY2018- 19.
A notable portion of this growth was steered by investments in equities and debt securities, which clocked a 31% CAGR, underscoring the strong appeal of global markets. With Indian equity markets displaying limited correlation with their global counterparts, the allure lies in reducing risk exposure to domestic economic uncertainties, highlighting the intrinsic value of Indian wealth’s global diversification.
Portfolio Diversification in Uncertain Times
Today’s global landscape is riddled with political tension, inflationary pressure, and unpredictable economic cycles. This reality has made diversification not merely a strategic choice, but a necessity. Indian investors are increasingly seeking exposure to mature markets like the United States and Europe, while also tapping into emerging markets for higher growth potential.
Moreover, as many of India’s high-net-worth individuals are deeply involved in their business ventures, there is a growing demand for active portfolio management. Professional advisors and discretionary mandates offer tailored guidance that allows these investors to confidently venture into unfamiliar yet promising international waters.
Indian GIFT City: India’s Gateway to International Financial Services
Launched in 2015 in Ahmedabad, GIFT City (Gujarat International Finance Tec-City) represents India’s ambitious blueprint to become a global financial hub. Offering tax incentives, relaxed regulations, and a world-class ecosystem for financial transactions, it mirrors successful models like Singapore’s and Dubai’s international zones.
While Family Investment Fund (FIF) structures at GIFT City have yet to receive regulatory approval for capital outflows from Indian residents, the groundwork has been laid. Still, awareness is an issue—only 55% of surveyed investors are familiar with GIFT City’s offerings, and nearly half remain indifferent.
Yet for those who are attuned, GIFT City stands out as a powerful vehicle for managing family wealth through a globally compliant and tax-efficient platform, yet another door opening in the landscape of Indian wealth global diversification.
Indian Accredited Investors: Unlocking High-Impact Opportunities
In 2021, SEBI introduced the accredited investor framework, targeting individuals and institutions capable of participating in high-risk, high-reward investments. With a minimum net worth threshold of ₹5 crore and annual income above ₹50 lakh for individuals, and ₹25 crore for corporates, this designation aims to democratise access to sophisticated financial instruments.
However, the uptake remains slow. Despite 50% awareness among potential investors, a striking 85% have not applied. This contrasts starkly with the United States, where 18.5% of households qualify as accredited investors.
Also Read : Schengen Visa Scam in India: Family-Run Fraud at French Embassy Uncovered