Why are Indian investments in global markets rising?

Indian investors are increasingly looking beyond domestic stock markets and investing in overseas shares and debt instruments.

Investments by Indian residents in foreign equity and debt markets have risen sharply, with the United States emerging as a major destination.

The trend is gaining momentum amid weaker performance in Indian equities, stronger gains in some international markets and growing interest in sectors such as Artificial Intelligence (AI) and semiconductors.

According to Reserve Bank of India (RBI) data, Indian residents invested USD 2.65 billion in overseas equity and debt instruments in 2025-26. It is around 56 per cent more than USD 1.70 billion invested in the previous financial year. The amount was more than five times the USD 471.8 million recorded in 2020-21.

The momentum continued in 2026. Overseas equity and debt investments reached approximately USD 2.61 billion between January and August 2026, compared with USD 1.40 billion during the same period in 2025.

Why investors are looking beyond Indian stock market

One reason behind the shift is the difference in recent market performance.

Indian equities have faced a difficult period, while major international markets have delivered stronger returns. Nifty 50 declined 8.16 per cent in one year, while the S&P 500 gained more than 10 per cent.

This performance gap has encouraged some Indian investors to explore opportunities outside the domestic market.

Interest in US technology and AI companies

Access to international companies is another major attraction.

Investing in overseas markets allows Indian residents to buy or gain exposure to businesses that may not be available on Indian stock exchanges. US technology companies, particularly those involved in AI, semiconductors and computer hardware, have attracted considerable interest.

Companies such as Nvidia, Microsoft, Micron, Broadcom and Alphabet have been among the overseas stocks drawing attention from Indian investors.

The growing interest in AI and semiconductor-related businesses has encouraged investors to explore international markets rather than limit their portfolios to Indian companies.

Moreover, investing only in one country’s stock market exposes a portfolio to risks linked to that economy.

By investing in international markets, individuals can spread their investments across different countries, industries and currencies. This can reduce dependence on the performance of a single market.

Rupee depreciation makes dollar assets attractive

Currency movements are another factor investors consider when investing abroad.

When the rupee weakens against the US dollar, dollar-denominated investments can become more valuable in rupee terms, provided their market value does not fall.

For example, an investor holding US shares may benefit from a rise in the share price as well as a favourable movement in the dollar-rupee exchange rate. The reverse is also possible if the rupee strengthens or the overseas investment loses value.

Easier access to international investments

Indian residents can send money abroad for permitted investments under the RBI’s Liberalised Remittance Scheme (LRS).

The scheme allows resident individuals to remit up to USD 250,000 in a financial year for permitted transactions, including investments in overseas shares, mutual funds and debt instruments.

Investors can access international markets through direct stock purchases, exchange-traded funds (ETFs) and overseas-focused mutual fund schemes.

However, restrictions on overseas investments by domestic mutual funds have limited fresh investment in some international schemes.

What should investors keep in mind?

The growing interest in global markets does not mean overseas investments are automatically better than Indian stocks.

Investors should consider currency fluctuations, international market volatility, taxation, transaction costs and the risks associated with individual companies and sectors. Concentrating investments in a few popular US technology stocks can also expose portfolios to sector-specific risks.

The recent rise in overseas investments reflects a change in how Indian residents are approaching their portfolios.

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