Why some Indian investors diversify into global assets, and whether you should

This article is for educational purposes only and should not be treated as investment advice. Investors should consult an independent financial advisor before making investment decisions.

For Indian investors, international diversification can be one way to gain exposure beyond the domestic market. It often comes up once an investor has a few years of domestic investing behind them, sometimes after reading about a global company they cannot buy on an Indian exchange. It is a reasonable question, and the process, costs, and tax rules matter more than most people expect.

What does "going global" actually mean, and how do the two routes differ?

Two distinct routes are often talked about as if they were one. An international mutual fund or fund-of-funds, offered by an Indian AMC, is bought and redeemed in rupees through your regular fund folio, with the AMC handling the overseas investing. Buying stocks or ETFs directly on a foreign exchange instead requires remitting money abroad under the RBI's Liberalised Remittance Scheme (LRS) and holding the investment through an overseas broker or platform.

Tax treatment depends on the investment route and the nature of the investment. The applicable rules and tax rates may change, so investors should verify the prevailing tax provisions before investing or filing their returns.

What does the LRS process involve, and what does it cost beyond brokerage?

For investors going the direct route, the process typically looks like this.

• Approach an authorised dealer bank or a tied-up overseas platform.
• Submit the LRS declaration with your PAN details.
• The bank collects TCS if your remittances cross the applicable threshold.
• The bank converts the funds and transfers them to your linked overseas account.
• You place the trade once the funds have landed.

As of 2026, individuals can remit up to USD 250,000 per financial year under the RBI's Liberalised Remittance Scheme, with TCS applying above a threshold. TCS is not an additional tax; it is adjustable against your final tax liability. Both figures have changed before, so confirm the current numbers when you remit.

Beyond brokerage, expect currency conversion margins, remittance charges, overseas platform fees, and, for international mutual funds or FoFs, an expense ratio on top of the underlying fund's own costs. None are unusual individually, but together they add more friction than a regular domestic SIP.

Why do some investors diversify into global assets, and does it remove risk?

Access to companies and sectors not listed on Indian exchanges is one reason, since several large global businesses have no Indian-listed equivalent. Spreading exposure beyond a portfolio sitting entirely in rupees and Indian markets is another. The currency angle needs a balanced read: a weaker rupee can boost returns on a foreign holding when converted back, but a stronger rupee has the opposite effect, so it is not a one-way tailwind or a reason on its own.

Global exposure does not remove risk; it changes which risks you carry. A portfolio spread across Indian and global equity can still fall if global markets fall together, as they often do in risk-off periods, and currency risk adds a layer rather than reducing anything. Diversification manages how holdings behave relative to each other; it does not eliminate the possibility of loss.

Our piece on how multi-asset strategies help preserve wealth across market cycles goes further into this.

So should you diversify into global assets?

No fixed allocation suits every investor, and treating global exposure as a flat 10 or 15 per cent of a portfolio misses the point. How much sense it makes depends on your goals, time horizon and how much complexity and cost you are willing to take on- the same questions covered in our piece on SIP versus lump sum investing. It is one component to weigh within a larger plan, not a decision made on its own.

Chola Securities does not currently offer international or global investing as a product. If you pursue this route, you would do so through a platform or fund house that offers it directly. We can help with the domestic side: building a well-diversified portfolio across Indian equity, mutual funds, and other asset classes that global exposure, if added, would sit alongside.

Final thoughts

Going global is a reasonable question once your domestic investing is on track, but it is a choice between two processes, with different paperwork, costs and, for direct investing, an annual limit to work within. That does not make it a bad idea, only one that deserves the same homework as any other addition to your portfolio.

To strengthen the domestic side of your portfolio first, you can explore your options through the Chola Securities KYC portal.

Disclaimer: Cholamandalam Securities Limited (CSEC) is a SEBI-registered stock broker and depository participant. CSEC does not provide investment advisory services. Investors are advised to consult an independent financial advisor before taking any investment decisions.