Weak domestic returns fuel India's overseas retail investing boom
BLK•International investments by Indian individuals more than doubled year on year to nearly $2.3 billion in the first half of 2026, as investors sought overseas assets after weak domestic returns. Asset managers are launching funds through GIFT City as existing overseas investment limits constrain supply.
1. Overseas demand grows
International investments by Indian individuals, made directly or through funds, more than doubled from a year earlier to nearly $2.3 billion in the first half of 2026. That pace could exceed the 2025 full-year record of $2.65 billion, Reserve Bank of India data showed. The Nifty 50 fell 5.3% over two years, while the MSCI Emerging Markets Index gained 47% and the S&P 500 rose 32%.
2. Funds seek new channels
At least half a dozen funds have launched in the past six months through GIFT City, where overseas investment limits that apply to domestic funds do not apply. The new launches include the JioBlackRock Advantage World Equity Fund, from the joint venture of Jio Financial and BlackRock, as well as funds from HDFC Asset Management, Parag Parikh and Aditya Birla Sun Life. RBI limits domestic funds to $7 billion in cumulative overseas investments and $1 billion per asset manager; those limits are nearly exhausted.
3. Investors and regulators
Assets in overseas fund-of-funds schemes rose 42% year on year to 488 billion rupees in September, while registered investors climbed 34% to nearly 2 million. Some overseas ETFs traded at substantial premiums to their underlying portfolio values, including the Motilal Oswal Nasdaq Q50 ETF, which was as much as 65% to 80% above value at times in September. Indian authorities are cautious about money flowing abroad but are not considering measures to curb the flows, three people at regulators said.
