Unlocking Global Opportunities: Himanshu Kohli Discusses Tax, TCS, and the Barriers Facing Indian Investors on ETMarkets Smart Talk.
In the context of rising global market indices and the need for diversification, many Indian investors still exhibit reluctance to fully embrace overseas investments. According to Himanshu Kohli, Co-founder of Client Associates, significant hurdles persist for these investors, including complexities related to taxation, concerns regarding TCS (Tax Collected at Source) under the Liberalized Remittance Scheme (LRS), and a general lack of familiarity with global investment vehicles. These challenges contribute to a narrow gateway for Indian investors looking to expand their portfolios beyond domestic equities, resulting in missed opportunities in emerging markets and other international assets.
For those already invested in U.S. markets, Kohli advises maintaining their current positions to avoid triggering adverse tax implications and structural limitations associated with feeder funds. He also emphasizes the importance of a strategic rebalancing approach over timing, particularly given the current dynamics of the U.S. dollar and emerging markets, which historically outperform during periods of dollar weakness. With the first month of the financial year providing a timely opportunity for renewed asset allocation, systematic approaches to investing can help mitigate risks associated with market volatility, especially in emerging markets.
Looking ahead, sectors such as technology and defense are poised for growth, supported by strong earnings momentum and geopolitical developments. Furthermore, Kohli suggests a cautious, disciplined buy-on-dip strategy in U.S. technology while recommending active management for investments in emerging markets. Investors should consider broad-based developed market ETFs as primary holdings but also look for thematic exposure in sectors such as energy and artificial intelligence to capture growth. Overall, a thoughtful and informed approach can empower Indian investors to successfully navigate global markets and optimize their portfolios.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)