NRI Talk: Top Global Sectors for Indian Investors: AI, EVs, Semiconductors and Renewable Energy, Decode Ashish Kashyap

“Investing in US stocks can be beneficial for Indian investors, but currency fluctuations need to be considered. When the rupee weakens against the US dollar, your US investments are worth more in rupee terms, potentially increasing your returns, says Ashish Kashyap, founder and CEO of INDmoney.

In an interview with ETMarkets, Kashyap said: “When Indians invest in consumer brands of daily use like Google, Apple, Microsoft, Meta or Amazon, they benefit not only from the growth of these giants but also from the appreciation of the dollar,” edited quotes

What factors should Indian investors consider before diversifying their portfolio in US stocks in 2025?

Before diversifying into US markets, Indian investors should consider currency exchange rates, as fluctuations can affect returns. It is also important to assess market conditions, economic growth projections and the regulatory environment.

The US Markets also provide access to sectors and geographies that are not well represented in the Indian market, offering opportunities for diversification.

By balancing investments in the US and Indian markets, investors can make portfolio allocations based on their investment horizon and risk tolerance.

Moreover, dollar appreciation can further accelerate returns and compound them over time.

Understanding these factors can help manage risks and enable more informed investment decisions.

What are the best ways for Indian investors to access US markets – direct stock purchases, ETFs or mutual funds?
Indian investors seeking exposure to US markets have two primary routes: direct and indirect routes.

Through the direct route, using platforms like INDmoney, investors can open accounts with US-based brokers and buy US stocks and ETFs directly.

This process is facilitated under the Reserve Bank of India’s Liberalized Remittance Scheme (LRS), which allows remittances up to $250,000 per person per year.

The route has gained popularity, with Indians investing nearly $6 billion in the US market, including $1 billion remitted last year alone.

Alternatively, indirectly, investors can opt for Indian mutual funds and ETFs that allocate assets across global markets, including the US.

These funds allow Indian investors to diversify without having to deal with the complexities of investing directly, making it an easy and efficient way to tap into the US stock markets. These investments amount to more than $10 billion.

Both routes offer their unique benefits. Direct investments offer greater control and access to a wider range of securities, while indirect investments offer flexibility and ease of management.

Investors should evaluate their financial goals, risk tolerance and operational preferences to determine the most appropriate approach for accessing US markets.

In total, it is estimated that over 4 million Indian investors have exposure to US markets through these channels.

Rupee at record low – How currency fluctuations affect returns for Indians investing in US stocks and how can they hedge this risk?
Investing in US stocks can be beneficial for Indian investors, but currency fluctuations need to be considered. When the rupee weakens against the US dollar, your US investments are worth more in rupee terms, potentially increasing your returns.

When Indians invest in consumer brands of daily use like Google, Apple, Microsoft, Meta or Amazon, they benefit not only from the growth of these giants but also from the growth of the dollar.

It’s always good to evaluate your risk tolerance and investment goals to determine if hedging aligns with your strategy.

Which sectors or regions globally are currently attractive to Indian investors looking to diversify?
Indian investors are increasingly seeking to diversify their portfolios by exploring high-growth sectors and regions outside of domestic markets.

Areas such as AI, electric vehicles, semiconductors and renewable energy are particularly attractive due to their rapid global expansion and potential for innovation.

Along with new giants such as Nvidia and Tesla, investing in established technology giants known as the Magnificent 7 – Meta, Apple, Amazon, Netflix and Google – exposes cutting-edge advancements and market leadership.

These companies are at the forefront of technological innovation, making them attractive choices for diversification.

How can an NRI build his retirement fund if he plans to settle in India after 60 years. How much should the corpus be?
NRIs planning to retire in India can benefit from favorable currency exchange rates, which can increase their wealth while converting foreign earnings into rupees.

Since this is for retirement, asset allocation should ideally lean towards relatively safe avenues including mutual funds, ETFs, fixed deposits and debt instruments.

The size of the retirement corpus varies depending on factors such as lifestyle, inflation and healthcare needs. A general rule of thumb is to aim for a corpus of at least 25-30 times your annual expenses to ensure a financially secure retirement.

What are the main investment options available to NRIs in India – Real Estate, Mutual Funds, Stocks or Fixed Deposits?
India’s fast growing economy offers promising investment opportunities to NRIs. As more investors shift from deposits to direct equity, NRIs can tap India’s strong growth potential through the stock market.

Mutual funds and ETFs offer diversification across sectors and asset classes, catering to different risk profiles. Fixed deposits (FD) and government-backed securities offer stability and predictable returns, which appeal to conservative investors. Real estate is a diversification tool for long-term investment.

Additionally, a surge in initial public offerings (IPOs) in 2024, which raised around ₹1.8 trillion, presents opportunities to invest in emerging businesses from scratch.

Which sectors in India are most promising for long-term investment for NRIs?
The electric vehicles (EV) industry is gaining momentum in India, with the government’s EV30@30 initiative aiming to make 30% of new vehicle sales electric by 2030, positioning India as a global leader in EVs.

The renewable energy sector, particularly solar and wind, aligns with global sustainability trends, making it a highly attractive sector for investment.

Artificial intelligence is driving innovation in industries such as healthcare, finance and manufacturing, presenting significant growth opportunities. Government support and a growing tech ecosystem make AI an attractive area for investment.

How can NRIs balance their investments between Indian and global markets to optimize returns?
Indian markets offer high growth potential, while global markets, the US As such, it provides exposure to developed economies, including both wealth creation and risk diversification opportunities.

We at INDmoney offer both ways, empowering investors to capitalize on growth opportunities in both the Indian and US markets.

We are democratizing access to a broad range of investment tools for Indian investors to build well-diversified growth portfolios.

How can NRIs use NRE or NRO accounts to effectively manage their Indian investments?
NRIs can manage their Indian investments through NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts.

NRE accounts offer tax-free interest and repatriation benefits of up to $1 million per financial year, while NRO accounts are meant to manage income earned in India.

INDmoney supports NRO accounts, allowing NRIs to easily invest in Indian stock markets and mutual funds.

(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)