At the IX US-India Strategic Partnership Forum (USISPF) Leadership Summit, the United States Ambassador to India, Sergio Gor, delivered a statistic designed to flatter both sides of the relationship. The US Embassy in New Delhi, he announced, had facilitated $20.5 billion in new investments flowing into the United States this year — more than any other American diplomatic mission in the world, and by his own account, well ahead of the traditional European powerhouses. “You have these beautiful embassies in Europe and they come up on stage and they say ‘We’re proud to announce five hundred million dollars,’” Gor said, contrasting this with New Delhi’s twenty-point-five billion. The line drew the intended reaction. It was framed as a triumph of the India-US partnership, evidence that American diplomacy in New Delhi is, in his words, “results-driven.”
I do not doubt the number, nor the diplomatic energy behind it. What interests me is the other half of the story that such announcements never tell: whose capital is this, and under what rules did it leave India?
II. One Country, Two Doors
India runs two entirely different regimes for capital wanting to leave its shores, and the gap between them is the real story hiding behind Ambassador Gor’s applause line.
The first door is for the ordinary resident individual. Under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), a resident Indian may remit no more than USD 250,000 abroad in a financial year, for permitted purposes ranging from education and medical treatment to the purchase of foreign securities or property. Cross a cumulative threshold of ₹10 lakh in “other purpose” remittances — which includes most forms of overseas investment — and the remitting bank must collect Tax Collected at Source at the punishing rate of 20 per cent, upfront, before the money even leaves the country. The saver eventually gets this back by adjusting it against tax liability or claiming a refund at the time of filing returns, but the cash-flow cost, and the compliance burden, fall squarely on the individual. The threshold was raised from ₹7 lakh to ₹10 lakh in Budget 2025, a modest concession; the 20 per cent rate for investment remittances was untouched.
The second door is for the corporation. Under the Overseas Direct Investment (ODI) framework administered by the RBI, an Indian company may make financial commitments — equity, loans, and guarantees combined — to its overseas joint ventures and wholly-owned subsidiaries of up to 400 per cent of its net worth, without seeking prior RBI approval at all, so long as the aggregate stays under one billion US dollars in a given year. This is not a modest allowance. A company with a net worth of ₹1,000 crore may, under the automatic route alone, commit ₹4,000 crore abroad. There is no TCS at the point of remittance. There is a Form ODI to file and an Annual Performance Report to submit each December, but the capital moves freely, and it moves at scale.
The individual saver is capped at a quarter of a million dollars and taxed for trying to reach it. The corporation is permitted four times its own net worth and asked only to file a form.
Both regimes are lawful, both are long-standing, and both serve genuine macroeconomic purposes — the LRS as a prudential brake on retail capital flight in a country still managing its external balance, the ODI route as a deliberate tool to let Indian enterprise build global scale. My argument is not that either regime is wrong in isolation. It is that the asymmetry between them, when placed side by side, tells a story about whose capital India trusts and whose capital it disciplines.
III. Who Is Actually Creating American Jobs
When a pharmaceutical major or a large industrial house uses the automatic ODI route to acquire a manufacturing facility, a distribution network, or a research outfit in the United States, it is very often creating American jobs with capital that originated in India — capital built on the back of Indian consumers, Indian regulatory protections, and in more than a few cases, Indian public procurement. This is not a hidden loophole exploited by a clever few; it is precisely what the 400 per cent automatic route was designed to enable. Successive RBI circulars, going back to 2013-14, have consciously calibrated this ceiling upward and downward as a matter of stated policy, most recently affirming it in the sweeping 2022 overhaul of the overseas investment framework.
Meanwhile, the same government machinery that welcomes this outbound corporate capital tells the retail saver, gently but unmistakably, to be patriotic with hers. Capital controls on individuals are routinely justified by references to macroeconomic stability, exchange rate management, and the need to conserve foreign exchange reserves for productive national use. These are not unreasonable considerations for a country that has, within living memory, faced genuine balance-of-payments crises. But if conserving foreign exchange for domestic use is truly the governing principle, it ought to apply with rough proportionality across both doors — not overwhelmingly at one and barely at all at the other.
The result, visible in plain sight at forums like USISPF, is a peculiar picture: India “cries for investment,” as the refrain goes in every budget speech and every state investor summit, even as its own largest and best-capitalised enterprises are, entirely lawfully, exporting billions to build capacity somewhere else.
IV. Where the Trade Numbers Fit
This domestic asymmetry is unfolding against the backdrop of an India-US economic relationship that is, by every recent account, entering a genuinely consequential phase. Ambassador Gor’s summit remarks came alongside confirmation that the long-negotiated bilateral trade agreement is in its final one or two per cent, with US Trade Representative Jamieson Greer having spent two days in New Delhi in the preceding week. American officials have separately spoken of “Mission 500” — a stated US administration goal of taking two-way bilateral trade to USD 500 billion by 2030, a target first floated when Prime Minister Modi visited Washington in February 2025 and reaffirmed since.
It is worth being precise about what that USD 500 billion figure actually represents, because it has acquired a life of its own in commentary. It is not, as sometimes loosely suggested, a figure for Indian investment flowing into the United States. It is a bilateral trade target — the combined value of goods and services moving in both directions by 2030. A related but distinct figure has also surfaced in reports on the pending trade deal: India is said to have offered to purchase up to USD 500 billion worth of American energy products, aircraft and parts, precious metals, technology goods, and coking coal over the next five years, as part of the concessions on the table. That is a five-year procurement commitment, not an annual investment flow, and it sits in a different column altogether from the ODI-financed corporate acquisitions I have described above. Conflating the two risks flattering the relationship with a number it has not yet earned.
What is genuine, and separately notable, is that Indian companies announced roughly USD 20 billion in fresh investment commitments at the SelectUSA Investment Summit earlier this year, described by American officials as the largest such announcement in that summit’s history. Add Ambassador Gor’s USD 20.5 billion embassy figure, and one begins to see the scale at which Indian corporate capital, entirely legally and entirely voluntarily, is underwriting American economic capacity even as New Delhi’s own investment-promotion machinery works overtime to attract capital in the other direction.
V. A Policy Choice, Not a Loophole
I want to be careful about the word “loophole,” because it implies an oversight that a sharper drafter would have closed. Nothing about the 400 per cent ODI ceiling is accidental. It has been debated, reduced during periods of rupee stress, and deliberately restored by name in RBI circulars that record the reasoning at each step. It reflects a considered judgement, dating back well over a decade, that Indian enterprise needed room to become genuinely global — to acquire technology, brands, and market access abroad that it could not build at home fast enough. On its own terms, that judgement has produced real successes across pharmaceuticals, IT services, and automotive components.
The retail saver’s cap and TCS regime is equally deliberate, born of 2013’s rupee crisis and reinforced in 2023 amid concerns about the LRS being used for purposes only loosely connected to genuine current-account need. Both policies, in other words, were reasoned responses to real problems at the time they were made.
What deserves scrutiny is not either policy taken alone, but the fact that fourteen years on, nobody in the policy establishment appears to be asking whether the gap between the two doors is still the right gap — whether the country that boasts of its billions moving to Ambassador Gor’s embassy might also ask why its own ordinary citizens still queue at the other, far narrower one.
VI. The Question Worth Asking
None of this argues for closing the ODI route, which would be economically self-defeating at a moment when Indian firms need scale to compete globally. Nor does it argue for abandoning all restraint on individual outflows in an economy still managing its current account with care. It argues, instead, for honesty in the public conversation. If corporate India is to be trusted with financial commitments of four times its net worth, the retail saver’s quarter-million-dollar ceiling and 20 per cent TCS deserve a serious, public re-examination rather than the periodic small mercies of a raised threshold. And when ambassadors and ministers cite headline investment figures at summits, the country would be better served by a press and a policy establishment that asks, each time, the simple follow-up question: whose money was this, and did it have a choice?