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By the NRIWallah team · Last reviewed: July 2026
Indian mutual funds vs investing where you live — with the currency drag most calculators ignore
How this works: Invest the same money every month (or as a lump sum) into an Indian mutual fund versus a fund where you live. Indian equity has historically returned more — but it grows in rupees. Over long horizons we convert the Indian corpus at a projected exchange rate, not today's, so you see what it is genuinely worth in your currency after currency drift and tax.
India side invests /month at today's rate.
Overseas side invests /month at today's rate.
Long-run average has been roughly 3%/yr. Set 0 to compare at today's rate.
India LTCG on equity is 12.5%, with the first ₹1.25 lakh of gains exempt.
Headline return in ₹
minus rupee drift
Real return in terms
Your fund is assumed to return . So on returns alone the Indian fund still leads — by a year in your currency. Tax is counted separately below, and can reverse this. So once currency is counted, the fund is already ahead by a year — before tax is even considered.
≈ at the projected rate
( if the rate never moved)
≈ at the projected rate
Indian fund
fund
Bigger corpus: — by after years.
Projected rate in years: 1 = (today )
Your Indian corpus of , converted to under different rates of rupee decline:
Compare each against the corpus of . Over long horizons this assumption often matters more than the return gap itself.
Before you act on this. Returns are assumptions, not promises — equity delivers them only on average and over long periods. Check you can actually invest first: many Indian AMCs restrict US and Canada residents, and US persons face punitive PFIC reporting on foreign funds, which can wipe out any advantage shown here. UK residents should check reporting fund status, or gains may be taxed as income rather than capital. Use the AMC eligibility checker before assuming a fund will take your money.
Estimates only. Assumes a constant annual return and a constant rate of currency drift — real markets and exchange rates do neither. The India LTCG exemption is applied once to total gains, not per year. Excludes fund charges, exit loads, and any dividend/withholding tax. Not investment advice.
Search for a SIP calculator and you will find dozens, all built for someone who earns, invests, and retires in rupees. Put in ₹25,000 a month at 12% for 20 years and they will show you a corpus of roughly ₹2.5 crore. It is an exhilarating number, and for a resident Indian it is the right one. For an NRI it is only half an answer, because the money going in probably started as pounds, dollars, or dirhams — and the money coming out may well need to be spent in that same currency.
This calculator runs the comparison the way an NRI actually experiences it. It puts the same money to work on both sides — an Indian mutual fund and a fund in your country of residence — and reports each corpus in its own currency and then in one shared currency, after capital gains tax and after the rupee has had two decades to drift.
The most expensive assumption in NRI investing is that a higher headline return is automatically a better outcome. A rupee return has to survive the rupee. Over the long run the rupee has tended to lose ground against hard currencies at roughly 3% a year, and that decline comes directly off your return when you measure in your own currency. A 12% Indian fund becomes about 8.7% in sterling or dollar terms. That is still a good return, and still ahead of a 7% developed-market fund — but the advantage is roughly 1.7 percentage points, not the 5 the headline suggests.
Push the assumption to 5% a year and the same fund delivers about 6.7% in your terms, and the Indian fund quietly loses. This is why the calculator makes the depreciation rate an input you control rather than a hidden constant. The honest question is not “which fund returns more?” but “does India’s return advantage survive the currency, and how sure am I about that?”
Two practical realities frequently overrule the arithmetic. The first is access: several Indian fund houses will not accept investments from US and Canada residents at all, so check the AMC eligibility checker before building a plan. The second is tax treatment at home. US persons face PFIC rules on Indian funds that are punitive enough to erase any return advantage; UK investors should confirm a fund has reporting status, or gains may be taxed as income instead of capital. Meanwhile a UK ISA, a US 401(k), or a Singapore or Gulf resident’s tax-free position can make the local option far stronger after tax than it looks before it.
Enter what you can genuinely invest each month, or a lump sum, and set a realistic horizon. Use returns that are net of fund charges on both sides — a direct-plan Indian fund and a low-cost index fund are not charging the same. Set the tax rate that actually applies to you, remembering that a sheltered account abroad may be zero. Then move the depreciation assumption between 0%, 3%, and 5% and watch what happens to the verdict. If the Indian fund wins across that whole range, currency is not your main risk. If the answer flips, you have learned something more useful than any single corpus figure: that this is a currency decision wearing the costume of an investment decision. For the shorter-horizon version of the same question, the FD calculator applies the same logic to deposits, and the home loan calculator does it for borrowing.
NRIWallah does not provide investment or tax advice. This calculator assumes constant returns and constant currency drift, neither of which occurs in reality, and past performance does not predict future results. Confirm your eligibility, tax position, and fund charges with a qualified cross-border adviser before investing.
