# If India is one of the fastest growing economies, why do I need to diversify my investments through buying overseas stocks also?

**URL:** https://community.aliceblueonline.com/t/if-india-is-one-of-the-fastest-growing-economies-why-do-i-need-to-diversify-my-investments-through-buying-overseas-stocks-also/13285
**Category:** General
**Created:** [January 3, 2025, 5:48am UTC](https://community.aliceblueonline.com/t/if-india-is-one-of-the-fastest-growing-economies-why-do-i-need-to-diversify-my-investments-through-buying-overseas-stocks-also/13285 "2025-01-03T05:48:35Z")
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### Author: ![Deepak\_Choubey](https://sea1.discourse-cdn.com/flex015/user_avatar/community.aliceblueonline.com/deepak_choubey/32/2128_2.png) [@Deepak\_Choubey](https://community.aliceblueonline.com/u/Deepak_Choubey)
#### Post date: [January 3, 2025, 5:48am UTC](https://community.aliceblueonline.com/t/if-india-is-one-of-the-fastest-growing-economies-why-do-i-need-to-diversify-my-investments-through-buying-overseas-stocks-also/13285/1 "2025-01-03T05:48:35Z")

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India is growing at an impressive pace, with a GDP growth rate of 8.2% in FY 2023-24, making  
it the fastest-growing major economy in the world. Future projections also look strong, ranging  
from 6.5% to 7.3% in the next few years. So, why think about overseas stocks when India is  
doing so well? Here’s the deal.  
Diversifying globally is all about managing risks. No matter how fast India’s economy grows,  
markets can be unpredictable. Political events, inflation, or even local crises can create  
turbulence. When that happens, having investments spread across other economies can act as  
a safety net.  
Another thing to think about is access to opportunities. India has some great companies, but  
let’s be honest—there are industries and businesses that just don’t exist here. For example,  
global tech giants, e-commerce platforms, and advanced renewable energy companies operate  
on a scale far beyond Indian firms. Investing overseas opens the door to these kinds of growth  
stories.  
Currency is another factor. The rupee has historically depreciated against stronger currencies  
like the US dollar. If you invest in US stocks, you don’t just benefit from the stock price  
appreciation; you also gain from the rupee’s depreciation. Over 25 years, US investments have  
delivered solid returns, boosted further by this currency effect.  
Now, let’s talk about risk-adjusted returns. By combining Indian and international stocks, you’re  
not just spreading risk — you’re also improving overall returns. A balanced portfolio with a 50:50  
split between Indian and US equities has historically shown 50% better returns per unit of risk.  
That’s a smart way to grow your wealth while staying protected.  
During tough times, this diversification becomes even more critical. Take the 2008 financial  
crisis, for instance. The Indian market fell by 52%, but the US market dropped only 37%.  
Similarly, in the 2020 COVID crash, Indian markets dipped 29%, while US markets were down  
20%. Having exposure to stable economies can help cushion the blow in such scenarios.  
US markets, for example, are less volatile than Indian markets. If you’re looking to reduce  
overall risk, adding some international stocks can help balance the ups and downs of a more  
volatile domestic market.  
Even businesses in India are going global. Outward foreign direct investment (FDI) from India  
reached $3.24 billion in October 2024, up from $2.55 billion in the previous year. If Indian  
companies are leveraging global opportunities, shouldn’t individual investors consider doing the  
same?  
Getting started isn’t complicated. You can use international feeder funds, invest directly through  
brokerages with global tie-ups, or explore apps that make it easy to buy foreign stocks. There  
are even portfolio management services for high-net-worth individuals looking for curated global  
exposure  
In short, India’s growth is exciting, but having a mix of international stocks adds stability, opens  
up new opportunities, and helps you handle market surprises better. It’s not about choosing one  
over the other — it’s about creating a balanced portfolio that works in any scenario.