Ireland Is The New Mauritius For Foreign Fund Flows Into India — Profit Insights

The flows have picked up since Jan. 2019, when Ireland ranked seventh among countries with Asset Under Custody, according to data provided by the National Securities Depository Limited or NSDL.

Ireland is now the fourth largest country with Asset Under Custody just tailing its European peer, Luxembourg, for investments into India.

The assets under custody for funds investing through Ireland have risen by 354% since Jan. 2019 to Rs 4.47 lakh crore. Ireland has replaced Mauritius as fourth largest investment gateway for investors to India. Mauritius has seen a 5% decline in Asset Under Custody in the same period.

A large part of the investments into India is coming through the UCITS —Undertakings for Collective Investment in Transferable Securities — a vehicle like mutual funds. UCITS are perceived to be safe and well regulated and are trusted investment vehicle for nearly 75% of all collective investments by small investors in Europe. China is also said to be using the UCITS route to invest globally.

The low cost to set up funds in Dublin is one of the key reasons for rising investor funds flow from the Euro member.  India has a DTAA agreement with Ireland that allows easy investments and relief from income tax and capital gains for funds set up in Dublin.

In fact, since Jan. 2023 asset under custody from Ireland has nearly doubled, the only other country to see assets double was Japan led by cheap money that chased equity returns. Nifty 50 gave a 38% return since beginning of January 2023.

Est Entré En Français

The French have been investing in India for long, but they intensified their investments into India from March 2023. They are now among the top 10 countries with assets under custody to invest in India. They have so far invested RS 1.50 lakh crore in equities at the end of August 2024. While the French entered, the Dutch are no longer among the top 10 countries that hold Indian assets.

Foreign Flows

Foreign Investors have so far invested Rs 88,961 crore in equity in this calendar year (2024) led by risk-on investments as IPOs brought in net foreign flows of Rs 66,055.18 crore chasing listing retruns. Net foreign flows in the July-Sept. quarter stood at Rs 97,395 crore making it biggest quarterly flows for foreign investors into the primary market.