An Indian national planning to live in the U.S. for at least the next decade recently turned to an online forum to seek guidance on cross-border investing, particularly comparing mutual fund investments in the United States versus India.
They shared that they have no plans to leave the U.S. in the near future and asked whether it would be wiser to focus long-term investments in U.S. mutual funds or continue investing in India. They also inquired about the process and requirements for investing in Indian mutual funds while living abroad.
The post sparked a wide-ranging discussion on topics like currency risk, tax implications, regulations for Non-Resident Indians (NRIs), and the practicality of managing investments across two countries. Many contributors emphasized that U.S. mutual funds may be more straightforward from a tax perspective for someone earning and residing in the U.S. Others pointed out that Indian mutual funds could still be a viable option for goals linked to the Indian rupee, though not without challenges.
One user highlighted how repatriation and taxation could create complications, noting that funds in India are harder to access and subject to foreign exchange risks. Another added that investing in the U.S. might be simpler and more manageable, especially when income, taxes, and financial planning are centered there. They also pointed out that U.S.-based ETFs focused on Indian markets could offer a middle ground.
Several commenters advised starting with U.S. retirement accounts like a 401(k), which provide tax advantages and often come with employer contributions. For those without access to a 401(k), IRAs were mentioned as an alternative. These users suggested maximizing investment options in the U.S. first before exploring opportunities abroad.
Others recommended globally diversified index funds or ETFs—such as those similar to the Vanguard Total World Index Fund (VT)—which spread investments across various international markets, including India. One user warned about the tax complexity of Indian mutual funds due to U.S. Passive Foreign Investment Company (PFIC) rules, suggesting that ETFs or funds listed on U.S. exchanges might be a simpler way to gain exposure to Indian markets while avoiding complicated tax reporting.
Overall, the consensus leaned toward prioritizing U.S.-based investments while maintaining flexibility for broader global exposure, especially if the individual plans to stay in the U.S. long term.
