Just came across this news about RBI reportedly considering a ₹50 lakh sub-limit under LRS to control dollar outflows.
My biggest concern is what happens to US stock investing if RBI decides to restrict capital account remittances as well.
Zerodha has been talking about launching US stocks for years. After multiple announcements and delays, it’s finally in beta.
Dhan was among the first of the newer brokers to launch through GIFT City earlier this year, and Groww has also recently rolled out its offering.
All these brokers must have spent considerable time and money building the infrastructure, getting approvals and launching these products.
Imagine finally getting everything ready, only for RBI to potentially change the rules.
Wouldn’t this be a major setback for the entire US investing ecosystem?
And what about existing investors? Would fresh investments stop? What happens to people regularly investing in US stocks for long-term diversification?
This is the only part I feel is a little frustrating. A product gets built, brokers spend time and money making it work, people start using it and then a change in the rules comes in.
Not saying regulation is bad, but there should be some stability too. Otherwise it becomes difficult for everyone to plan around these products.
Looks like RBI is trying to manage dollar outflows and support the rupee. But restricting or limiting overseas spending is only a short-term measure; the long-term solution is to strengthen exports and attract stable foreign investment.
Since this is still a proposal hoping certain things will change as big players would still want diversification.
Well i was speaking official workarounds . However i would echo your thought the ones with money will find a way around it, while the common man will bear the brunt.
The rich have workarounds, the middle class has compliance.
. However i would echo your thought the ones with money will find a way around it, while the common man will bear the brunt.