Think & invest beyond India

India is not “the market”. It’s just “a market”. Don’t get us wrong. We’re bullish on India. Always have been. We’re thrilled to see Indian investors finally doing what we’ve been saying for 22 years. Record SIP flows, folios up 2.5x in five years, growing faith in equities and so on. So, why this headline now? Have we changed our stance? Not at all. But now that we are paying attention to logic and long-term thinking, it’s time we bring up something just as important: Geographical diversification. As of April 30, 2025, India accounts for just 4.2 per cent of global stock market capitalisation. The US, meanwhile, alone holds nearly half the world’s equity market. Yet, most Indian portfolios are entirely domestic. We are trying to build 30 years of wealth by relying on just 4 per cent of the global opportunity, often without realising it. That’s not confidence. That’s confinement. The demand is rising but the access is shrinking It’s important to note that Indian investors have not been completely blind to global opportunities. Over the years, interest has surged, and so has action. When Principal fund house launched India’s first international fund in 2004 (now Sundaram Global Brand Theme Fund), it managed to raise just Rs 65 crore. Fast forward to 2021, a record 22 international fund launches raised over Rs 9,000 crore, riding the post-pandemic wave of interest in US tech and global diversification. But in 2022, the party slowed. SEBI’s overseas investment cap of $7 billion was reached. Many fund houses closed their international funds to new investors. And since then, only 10 international fund schemes have launched, raising a total of Rs 413 crore. Although investor appetite has grown, the system hasn’t kept up. What we now have is growing demand and narrowing supply, a bottleneck that every investor must learn to navigate. This isn’t a story about what you have lost. It’s about what’s still open and how to use it wisely. So, let’s look at the upsides of investing abroad and how to do so.  The big picture India hasn’t said no to global investing. It said: Yes, but slowly. From privilege to possibility, and now, to practicality, the Indian investor’s journey into the global market is still in progress. You have more options than before. But fewer than you should. Why go global When Indian investors think of international stocks, they often picture Apple, Amazon or Tesla. But global investing isn’t about buying global fame, it’s about building local resilience. It’s about ensuring that your portfolio is not overexposed to one economy, one currency, one policy regime or one set of risks. There are three other reasons why global investing deserves a place in your long-term plans. And it has nothing to do with glamour or hype. Sectoral access India doesn’t offer. Despite our fast-growing economy and deepening equity markets, India remains underrepresented in many of the world’s most powerful investment themes. We don’t have a global leader in semiconductors. We barely have any listed plays in AI infrastructure or cybersecurity. Our biotechnology and luxury goods sectors are nascent at best. Gaming players are underdeveloped or unlisted in India. Compare that with the S&P 500, where 42 per cent of the index is made up of tech and innovation-first companies like Microsoft, NVIDIA, Adobe and Alphabet (Google). If you only invest in India, you’re missing entire sectors of the global economy; sectors that may power long-term growth for decades. What this means is that global stocks won’t always outperform, but they often behave differently. And that difference helps reduce portfolio risk. Risk diversification. Indian and global markets don’t always move together. And that’s exactly the point. In times of localised stress (policy surprises, currency shocks and geopolitical tensions), global equities can act as a buffer. Even during global crises like Covid-19, US markets rebounded faster, thanks to tech resilience and liquidity flows. Check the figure above. Rupee depreciation. Investing in global assets comes with a unique bonus: Currency appreciation, not of the rupee, but of the foreign currency you’re investing in. Take the US dollar. Over the last 25 years, it has consistently strengthened against the Indian rupee. In 2000, $1 equalled Rs 44. Today, it’s hovering around Rs 85. That’s an annualised gain of about 2.7 per cent. This means if your US mutual fund earns 8 per cent in dollar terms and the rup

This article was originally published on June 20, 2025.