US ETF SIP from India: projecting your corpus in INR over 10–20 years

A SIP (Systematic Investment Plan) is how most Indian investors build wealth — fixed amounts, regular intervals, ignore the noise. The same discipline applied to US ETFs via LRS creates a powerful long-term position that captures both US equity growth and the structural rupee depreciation tailwind.

Use the US ETF SIP calculator to project your exact corpus across different return and FX assumptions.

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Why US ETF SIP works differently from Indian SIP

Indian equity SIP: You instruct your mutual fund to auto-debit on a fixed date. Fully automated. Tax treatment: LTCG at 12.5% after 12 months (for equity funds, revised thresholds apply from FY 2024-25 budget changes).

US ETF via LRS: Semi-manual. You initiate an LRS remittance from your bank, funds arrive at your US broker in 1–3 days, then you buy. No true auto-SIP unless your platform offers scheduled orders. Tax treatment: LTCG at 12.5% after 24 months (not 12 months like Indian equity).

The 24-month holding period is the critical difference — in a US ETF SIP, each monthly purchase has its own 24-month clock. A lot you bought in January 2025 becomes LTCG-eligible in January 2027. You must track purchase dates for each lot.

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The rupee depreciation tailwind

Historical rupee depreciation vs dollar: approximately 3–4% per year over 20 years.

At 3% annual depreciation, a US ETF returning 10% in USD returns approximately 13% in INR per year. That's not a prediction — currency moves are volatile year to year — but the long-run direction is structural given India's inflation differential with the US.

INR return ≈ USD return + INR depreciation rate

This tailwind is automatically captured in your INR corpus — when you convert your USD position to INR at a later, higher exchange rate, the gain is included in your capital gains calculation. You pay LTCG at 12.5% on the total INR gain including the currency component.

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Projection: ₹10,000/month into VTI

Assumptions: USD ETF returns 10% p.a. in USD, rupee depreciates 3% p.a., starting USD/INR = 93.

Years	Invested (INR)	Corpus in USD	Corpus in INR	LTCG tax @ 12.5%	Post-tax INR corpus
10	₹12 lakh	≈$28,000	≈₹34 lakh	≈₹2.7 lakh	≈₹31 lakh
15	₹18 lakh	≈$52,000	≈₹80 lakh	≈₹7.7 lakh	≈₹72 lakh
20	₹24 lakh	≈$90,000	≈₹1.7 crore	≈₹18 lakh	≈₹1.52 crore

Note: Each lot is taxed separately at LTCG when sold. Aggregate approximation shown. Use the US ETF SIP calculator for lot-by-lot modelling.

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Comparison: US ETF SIP vs Indian equity SIP

	US ETF SIP (VTI)	Indian equity SIP (Nifty 50)
USD return assumption	10% p.a.	N/A
INR return (incl. FX)	~13% p.a.	~13% p.a.
LTCG holding period	24 months	12 months
LTCG tax rate	12.5%	12.5% (above ₹1.25 lakh)
Automation	Semi-manual	Fully automated
FX risk	USD/INR moves	None
Schedule FA required	Yes	No
Exposure	US market	Indian market

On a pure return basis, over long periods, the two are broadly similar — both are around 13% in INR. The US ETF SIP adds diversification away from India-specific risk and exposes you to companies not listed in India (NVIDIA, Apple, Meta, etc.).

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The LRS friction and TCS

Each remittance requires an LRS instruction at your bank. Above ₹10 lakh total per year, 20% TCS is deducted. At ₹10,000/month = ₹1.2 lakh/year, you are well below the TCS threshold.

If you scale up to ₹1 lakh/month = ₹12 lakh/year, you cross the ₹10 lakh threshold and pay TCS on the incremental ₹2 lakh: 20% × ₹2 lakh = ₹40,000 TCS. This is a creditable prepayment — you claim it back in your ITR. It's cash drag, not a permanent cost.

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ETF selection for a long-term SIP

ETF	What it tracks	Expense ratio	Best for
VTI	Total US market (3,700+ stocks)	0.03%	Maximum diversification
VOO	S&P 500 (500 large caps)	0.03%	Simple large-cap US exposure
QQQ	Nasdaq 100 (tech heavy)	0.20%	Higher growth, higher volatility
VT	Global all-world (US + international)	0.07%	One-fund global diversification

For a long-term SIP with no tactical view, VTI or VOO at 0.03% is the cleanest choice.

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Schedule FA: the annual obligation

Every financial year you hold US ETF units in your overseas brokerage, you must file Schedule FA in your ITR disclosing the holdings. This is independent of whether you made any transactions in the year. The Schedule FA helper computes the initial value, peak value, and closing balance in INR for each position.

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The one-line version

A ₹10,000/month US ETF SIP for 20 years at 10% USD returns + 3% rupee depreciation grows to approximately ₹1.5 crore post-tax — comparable to an Indian equity SIP, with the added benefit of US market exposure and portfolio diversification. Use the US ETF SIP calculator to model your numbers.