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All you need to know about India INX2 min read

July 11, 2022
India INX


All you need to know about India INX2 min read

Gone are the days when portfolio diversification meant only picking top-quality stocks from different sectors and assuming that they will cancel out each other’s risk as they are from the industries.

Today, Indians can invest in global stocks, without being restricted to buying domestic stocks only. So the time has come to think of diversification not just in terms of sectors, or asset classes but also in terms of geographies.

But how?

Through India INX, the country’s first international exchange, investors can invest in global stocks and diversify their portfolios.

The exchange, owned by the BSE, not only offers more opportunities to invest around the globe but also allows domestic companies to raise capital through the robust foreign debt market.

India INX offers 22-hour trading access to a wide range of products like stock derivatives, commodity derivatives, currency derivatives, debt securities, and indexes. It operates six days a week.

India INX is regulated by the International Financial Services Authority (IFSCA). Asian Development Bank has already tapped the India INX in 2020 to raise around $118 million through INR-linked bonds.

At present, investors can choose to invest in 135 exchanges in 33 countries and 23 different currencies.

To make investments into foreign securities more accessible, India INX has established an SPV (special purpose vehicle), the India INX Global Access, a platform for routing orders across multiple international exchanges.

Investments made through India INX give direct and easy access to international markets with lots of opportunities to invest.

What is India INX?

India INX is the leading international exchange in Gujarat’s GIFT city with a market share of ~84% in the derivative trading segment, and ~97% in the trading of listed debt securities.

Through the India INX platform, resident Indians can easily and conveniently transact and invest in global securities at their will. Investors can invest up to $250,000 under the Reserve Bank of India’s LRS route.

What is LRS?

Under the Liberalized Remittance Scheme of RBI (LRS), any resident individual including a minor (under the supervision of a legal guardian) can invest up to $2,50,000 per year to acquire assets in foreign countries.

But before investing, an Indian needs to convert his INR-based investment into US Dollars through registered brokers. There is no limit on the frequency of the transactions.

Equity investments made through the LRS route will fall under the category of capital account transactions. 

As per the LRS rules, an investor can re-invest the dividend/interest earned over the investments made abroad. 

In further blogs, we’ll help you get a better understanding of how to invest in global stocks. So watch this space for more!