Routes to International Investing — Indian Funds, LRS, GIFT IFSC

For ticket sizes below ₹10-20 lakh of total international allocation, the Indian international mutual fund route is almost always the right choice. Operationally simple — your existing folio, SIP option, no LRS paperwork. The constraint is the fund universe (limited to currently-open SEBI-registered international FoFs) and the FY24 tax framework (slab-rate on gains regardless of holding period). For SIPs of ₹5,000-50,000/month, this route delivers 95% of the diversification benefit at 5% of the operational complexity. For ticket sizes ₹20 lakh to ₹2 crore where the investor wants direct ownership of US stocks (Apple, Nvidia, Microsoft directly rather than through an FoF) or specific instruments unavailable in Indian funds, the LRS route through US/global brokerages becomes attractive. The investor opens an account with Vested, IB, or similar, remits USD via LRS, and trades directly in their name. The advantages: full universe of US-listed stocks and ETFs, real-time pricing, often lower expense ratios on US-listed ETFs (e.g., 0.03% on a Vanguard S&P 500 ETF versus ~0.5% on an Indian S&P 500 FoF). The disadvantages: LRS paperwork annually, foreign-source income tax reporting, W-8BEN compliance, US estate tax exposure on US-situs holdings (above modest exemption levels), and operational responsibility for FATCA/CRS compliance. Trustner does not directly handle LRS-to-US brokerage routes; we educate clients and refer to specialised partners. For ticket sizes ₹50 lakh to multi-crore where the investor specifically wants USD-denominated savings (matching future USD liabilities) and Indian-regulator framework, GIFT IFSC is the optimal route. USD funds, USD FDs, USD insurance — all within IFSCA framework, no offshore brokerage complexity. The disadvantage versus direct LRS: smaller universe than full US markets. The advantage: Indian regulatory familiarity, no US estate tax exposure, integrated with Indian tax reporting through Indian AMCs and banks. Many investors use a combination — Indian international FoFs for monthly SIPs (operational simplicity, dollar-cost averaging), GIFT IFSC for larger lumpsum allocations (USD denomination, future-liability matching), and direct LRS only for specific large-ticket use cases.