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Indian Investors Turn to Global Markets for AI, Semiconductor Exposure Amid LRS and GIFT City Access
When the sun rises over Mumbai, a new wave of investors is looking beyond the familiar shores of the Indian stock market, chasing the glow of global opportunities.
Niteen Dongare, Director and CEO of Anand Rathi International Ventures IFSC Pvt Ltd, told ETMarkets that the Liberalised Remittance Scheme (LRS) has made it easier for Indian residents to invest abroad. With a limit of US$250,000 per financial year, the scheme, coupled with digital platforms and the regulatory framework of the Foreign Exchange Management Act, offers three clear benefits: diversification across countries and currencies, the creation of a USD‑denominated asset base, and exposure to dollar appreciation.
India’s domestic equity market has lagged behind its global peers in recent months. Dongare pointed to tariff pressures, geopolitical tensions in the Middle East, and the Hormuz crisis as factors that have capped domestic returns. He argues that allocating 20‑30 % of a portfolio to global equities can serve as both a risk diversifier and a return enhancer, with the United States standing out as the most attractive destination because of its sheer size and the concentration of AI and semiconductor leaders.
AI and semiconductors emerged as the dominant themes in the interview. Dongare highlighted the meteoric rise of companies such as Nvidia, Micron Technology, TSMC, and Hynix, all of which have crossed the trillion‑dollar mark in market capitalisation. He stressed that AI has already proven its value across multiple sectors, while the semiconductor supply chain remains a critical backbone of global technology infrastructure.
When it comes to accessing these themes, Dongare outlined three primary vehicles. First, global exchange‑traded funds (ETFs) provide diversified exposure to broad indexes such as the S&P 500 or technology‑focused ETFs. Second, direct stock purchases allow investors to target specific AI or semiconductor names, but require more research and carry higher concentration risk. Third, GIFT City funds—fund‑of‑funds that invest in global ETFs and international markets—offer a regulated, digital route for Indian residents and can be accessed without a PAN for certain categories.
Beyond the United States, Dongare pointed to Taiwan and South Korea as key markets for semiconductor manufacturing. TSMC, headquartered in Taiwan, and SK Hynix, based in South Korea, lead the way in advanced chip production. He noted that investors seeking exposure outside the U.S. should monitor these markets, especially as they benefit from lower production costs and strong government support.
The interview also touched on emerging themes such as space technology and defence. Dongare acknowledged that the recent SpaceX IPO has sparked interest among Indian investors, but cautioned that the space sector remains capital‑intensive and less mature than AI or semiconductors. He concluded that, for the next three to four years, AI and semiconductors will likely dominate investment flows.
In short, Indian investors are reallocating a significant portion of their portfolios to global markets, driven by the LRS, digital platforms, and the appeal of AI and semiconductor growth. Global ETFs, direct stocks, and GIFT City funds provide multiple avenues for exposure, while Taiwan and South Korea offer alternative semiconductor opportunities. The interview underscores the importance of diversification, dollar appreciation, and careful selection of high‑growth themes in building a resilient investment strategy.
Niteen Dongare, Director and CEO of Anand Rathi International Ventures IFSC Pvt Ltd, told ETMarkets that the Liberalised Remittance Scheme (LRS) has made it easier for Indian residents to invest abroad. With a limit of US$250,000 per financial year, the scheme, coupled with digital platforms and the regulatory framework of the Foreign Exchange Management Act, offers three clear benefits: diversification across countries and currencies, the creation of a USD‑denominated asset base, and exposure to dollar appreciation.
India’s domestic equity market has lagged behind its global peers in recent months. Dongare pointed to tariff pressures, geopolitical tensions in the Middle East, and the Hormuz crisis as factors that have capped domestic returns. He argues that allocating 20‑30 % of a portfolio to global equities can serve as both a risk diversifier and a return enhancer, with the United States standing out as the most attractive destination because of its sheer size and the concentration of AI and semiconductor leaders.
AI and semiconductors emerged as the dominant themes in the interview. Dongare highlighted the meteoric rise of companies such as Nvidia, Micron Technology, TSMC, and Hynix, all of which have crossed the trillion‑dollar mark in market capitalisation. He stressed that AI has already proven its value across multiple sectors, while the semiconductor supply chain remains a critical backbone of global technology infrastructure.
When it comes to accessing these themes, Dongare outlined three primary vehicles. First, global exchange‑traded funds (ETFs) provide diversified exposure to broad indexes such as the S&P 500 or technology‑focused ETFs. Second, direct stock purchases allow investors to target specific AI or semiconductor names, but require more research and carry higher concentration risk. Third, GIFT City funds—fund‑of‑funds that invest in global ETFs and international markets—offer a regulated, digital route for Indian residents and can be accessed without a PAN for certain categories.
Beyond the United States, Dongare pointed to Taiwan and South Korea as key markets for semiconductor manufacturing. TSMC, headquartered in Taiwan, and SK Hynix, based in South Korea, lead the way in advanced chip production. He noted that investors seeking exposure outside the U.S. should monitor these markets, especially as they benefit from lower production costs and strong government support.
The interview also touched on emerging themes such as space technology and defence. Dongare acknowledged that the recent SpaceX IPO has sparked interest among Indian investors, but cautioned that the space sector remains capital‑intensive and less mature than AI or semiconductors. He concluded that, for the next three to four years, AI and semiconductors will likely dominate investment flows.
In short, Indian investors are reallocating a significant portion of their portfolios to global markets, driven by the LRS, digital platforms, and the appeal of AI and semiconductor growth. Global ETFs, direct stocks, and GIFT City funds provide multiple avenues for exposure, while Taiwan and South Korea offer alternative semiconductor opportunities. The interview underscores the importance of diversification, dollar appreciation, and careful selection of high‑growth themes in building a resilient investment strategy.
