As the Indian rupee weakens and domestic equities underperform, Indian investors are increasingly turning to foreign markets for better returns. In the 11 months leading to February, they invested over $2.2 billion in overseas equities and debt, representing a 60% increase from the previous year, according to the Reserve Bank of India. The MSCI India Index has lagged behind its emerging markets counterparts by nearly 50% over the past year, prompting investors to seek diversification. The rise in foreign investments is also facilitated by improved access through platforms and clearer regulations from GIFT City, India's low-tax hub. Notably, assets managed by Vested Finance Inc. reached $1 billion in April, doubling from the previous year, as investors seek exposure to high-growth sectors like artificial intelligence and semiconductors, which are less represented in India's $5 trillion equity market. Despite the shift, domestic mutual funds continue to attract significant investments, averaging about $3 billion monthly, indicating that while foreign investments are growing, they still represent a small portion of overall flows.