The Indian rupee has depreciated against the US dollar by approximately 4-5% annually over the past two decades. For an Indian HNI with a purely domestic portfolio, this silent erosion compounds into significant purchasing power loss, especially for those with international obligations such as children studying abroad, global travel, or planned migration.
Beyond currency hedging, global diversification offers access to sectors and companies that simply do not exist on Indian exchanges. There is no Indian equivalent of Nvidia, ASML, or LVMH. The US market alone represents 60% of global equity market capitalisation, yet most Indian portfolios have zero international exposure.
The Liberalised Remittance Scheme (LRS) permits Indian residents to remit up to USD 250,000 per financial year for investment purposes. Through IFSCA-regulated platforms at GIFT City, investors can access US equities, global ETFs, international bonds, and structured products with full FEMA compliance.
Tax treatment of global investments requires careful planning. Gains from foreign securities held over 24 months qualify as LTCG under the new regime. DTAA benefits can reduce effective tax rates, particularly for dividend income from US securities (treaty rate of 25% vs the statutory 30% Indian bracket).
At Neoma Capital, we recommend a minimum 15-20% global allocation for HNI portfolios exceeding Rs 5 crore. This allocation serves three purposes: currency hedging, sectoral diversification, and access to the innovation premium that global markets command.