If you are convinced about the benefits of having international exposure, the mutual fund route is the most convenient option.

Under LRS, you can get access to all the exchange traded funds (ETF) listed on foreign bourses. These funds invest passively in an index of stocks, much like the Nifty ETF or Sensex ETF. Prominent players like iShares and Vanguard offer multiple options here, with funds dedicated to US stocks, emerging markets and other global stocks, apart from products investing in REITs, commodities and bonds. Being passively managed products, these charge a much lower expense ratio. The tax implications on sale of such units are the same as for foreign shares.

There are many schemes available locally that help you access mutual funds abroad. Since these do not come under the purview of the LRS, you can invest directly without the ac companying restrictions. These global-oriented schemes vary in structure. There are those that invest abroad directly and those that do so indirectly. The former category consists of funds that do not rely on an offshore fund manager and make investment decisions on their own. Funds that invest abroad indirectly operate either as feeder funds (pool in money from here and transfer it to the parent fund managed offshore) or pure fund of funds (invest the money in a basket of offshore funds).

If you are investing in locally-sold global funds, the tax treatment is on par with non - equity funds or foreign stocks. The equity funds which invest more than 35% of their corpus in foreign equities are not eligible for exemption from long-term capital gains or the lower tax on short-term gains. However, global funds that restrict foreign investments to 35% of the corpus get the same tax treatment as domestic equities.