[HN Gopher] Launch HN: Inri (YC W23) - Wealthfront for Investing...
___________________________________________________________________
Launch HN: Inri (YC W23) - Wealthfront for Investing in India
Hello everyone, I'm Nishad, cofounder at Inri
(https://www.goinri.com/), an investment platform for Indian expats
to diversify capital in India, without any taxation or repatriation
hassles. Super excited to be launching on HN, the platform that I
personally nerd on and has helped me discover some of my favorite
products early. My cofounder Hemant (@hemantgangolia) has been
living in the US since 6 years and has tried multiple times to
invest in India. He couldn't go ahead with the process because bank
account opening was a challenge and the process after that wasn't
clear. There is complexity around taxation, moving money back and a
general lack of clarity on where to invest. Even though there are
currently over 30 million Indian expats globally, there are no
digital, full-service solutions offered for them specifically. US
solutions focus only on US investments and Indian solutions focus
only on Indian customers--this makes the India <> US belt
underserved. Indian banks with overseas branches offer these
services, but investors don't trust these banks because of conflict
of interest. There are other small players in the market but they
expect customers to do their own service, which is not what
customers want, based on our learnings. We found a lot of other
Indian expats in the same situation as us - wanting to invest in
India for financial and emotional reasons, but unable to do so
easily or consistently. We wished a simple product existed to solve
for this online. We couldn't find one, so we built it. Inri is
like Wealthfront for your India investments. It is a web platform
that offers curated mutual fund portfolios and solves for all tax
compliance and repatriation needs online. We have curated the funds
based on performance, history and compliance based on your resident
country, and funds are selected based on your risk preference,
similarly to Wealthfront. We facilitate investments through central
platforms like National Stock Exchange and show the holdings via a
dashboard on the platform once the investments are done.
Additionally, we do this while making tax compliance and
repatriation easy. Just log in to the platform, upload your
documents, approve the emails with details confirmation and you're
sorted. Currently, only people with a PAN card (Indian financial
identity document) can invest. Our early customers are all people
who have tried doing this before, but gave up because of all the
hassle. The fact that they could get invested in just 2 days vs
weeks for traditional alternatives was unheard of to them. We know
this is a bit of a niche product for HN but we also know that there
are quite a few Indian expats like us here, who could make use of
it--and we hope it makes interesting enough reading for everybody
else. We would love to get your feedback! Thank you!
Author : nish93
Score : 58 points
Date : 2023-03-31 16:02 UTC (6 hours ago)
| wtmt wrote:
| A few comments and advice on investing in India.
|
| The target audience for this would know this, but it's useful to
| be reminded. INR (Indian Rupee) depreciates on average about 4%
| each year against USD (US Dollar). When you look at the gains
| from investments in India in USD terms, it would be lower due to
| the continuously weakening currency. As an emerging market and
| one with a still-developing stock market, the returns could be
| comparatively a lot higher along with volatility.
|
| People in India who "invest" ("gamble" may be a better term) in
| the stock market are used to larger double digit returns and
| chase "multi baggers" (check some financial publications in India
| and you'll find many headlines about multi baggers). This makes
| the same bunch beat a retreat at the first sign of a downturn.
|
| Tax laws in India are getting more complex and onerous (because
| the government believes everyone to be a tax evader unless proven
| otherwise), and it seems like the government wants to slow down
| the outflow of money from the country while getting a larger
| slice in advance. Though the government wants to attract non-
| resident Indians to invest (they've historically sent a lot of
| money into the country), it's also reluctant to provide an
| attractive taxation and tax compliance experience. If you choose
| to invest through this or any other platform, keep an eye on the
| changing tax laws so that you can exit before things suddenly
| become painful with very little notice. As an example, though the
| union budget with tax changes was presented in the beginning of
| February in the parliament, the government made a slew of changes
| that impact whole classes of mutual funds just a few days ago
| with no discussion in parliament and passed all of those (because
| the ruling party has a majority).
| eldaisfish wrote:
| To add, insider trading and financial misreporting is rampant
| in Indian stocks. Just look at the recent Hindernberg report on
| Adani as a starting point. The shocking aspect is that this is
| accepted as the norm.
|
| US stock markets and regulations are not without fault but they
| are leagues better than stocks in countries like India and
| China.
|
| Oh and to add on to another excellent point you brought up -
| Indian regulations are unstable and change on a whim. India's
| government recently proposed subjecting long term debt holdings
| to tax, a move that is widely criticized.
| nish93 wrote:
| A few comments on this
|
| 1. Yes it's true that INR has depreciated vs $. But all of that
| depreciation has been coming in the zero interest regime we
| have been in the last decade. If you see the previous decade,
| INR was flat vs $ and NIFTY also grew more than S&P500. Point
| here is to say that there are financial cycles and the next
| cycle is likely going to be different (because of higher
| interest rates at least in the medium term) than the last one.
| Additionally, higher interest rates also makes US equities less
| attractive than what they were in the last decade, and India is
| likely to be among the fastest growing economies in the next
| decade so a good bet for diversification for 5-10% of your
| wealth.
|
| 2. Can you elaborate on tax laws becoming more onerous for
| NRIs? The Feb law change doesnt affect NRIs remitting money
| outside, so dont think is relevant in this case.
| mbesto wrote:
| > INR was flat vs $ and NIFTY also grew more than S&P500
|
| > India is likely to be among the fastest growing economies
| in the next decade so a good bet for diversification for
| 5-10% of your wealth.
|
| I'm going to ask this in the most laymen way possible...how
| is it possible that a country that is growing faster than the
| US depreciates the money value relative to the US by so much?
| I genuinely believe India has stronger growth, but those two
| facts don't seem to match up. One would think that a stronger
| economy would imply more investment, and thus push the price
| up on the currency. ELI5.
| govg wrote:
| Tangentially related to your first point is the phenomenon /
| heuristic of :
| https://en.m.wikipedia.org/wiki/Interest_rate_parity
| akgoel wrote:
| I currently have some money in an Indian mutual fund through my
| Schwab brokerage, WAINX. What's the difference between Inri, and
| just investing in an Indian mutual fund? Schwab shows 4 different
| India-focused equity funds from Eaton Vance, ALPS/Kotak,
| Matthews, and Wasatch.
| nish93 wrote:
| The major difference here is that you invest directly through
| your NRE/NRO bank account in India.
|
| 1. WAINX is an actively managed fund, if you are just looking
| for tracking the Indian index (NIFTY), there's INDY here. Their
| tracking error (because of frequent currency transactions +
| cash requirements) cumulates to a large underperformance vs
| investing directly. In the last 5 years, there's a cumulative
| return of 14% for INDY vs 69% for NIFTY. Even accounting for
| currency depreciation and remittance charges, the $ adjusted
| return for NIFTY is at least 2x.
|
| Even active funds like WAINX, EPGIX havent beaten investing
| directly over the long run. You can compare these with NIFTY
| growth % - USD/INR growth % - two-way currency transaction
| charges to confirm.
|
| This is a fair option for anyone who cant access the Indian
| markets directly, but for Indians with PAN card, the efficiency
| of investing directly is much higher.
|
| 2. Depth of funds is still not as good as in the Indian market.
| India has 8000+ mutual funds listed, with specific allocations
| available to mid cap, small cap, thematic (tech vs pharma vs
| consumer vs infra), equity-debt hybrid etc.
|
| 3. We are starting with mutual funds but plan to offer all
| asset classes for investments including real estates.
|
| Let me know if any of this is not clear
| nsenifty wrote:
| If you are based in the US and directly invest in mutual funds
| in India, keep in mind the US taxes it in extremely unfavorable
| terms via PFIC[0]. I browsed through their website and it
| appears their tax guidance is only for Indian taxation, which
| is fair but something to keep in mind. If you have to deal with
| US taxes, I would highly avoid holding mutual funds abroad, and
| just buy US-based India-focused funds.
|
| [0]
| https://creativeplanning.com/international/insights/american...
| newhotelowner wrote:
| It says PAN card is needed. What about aadhar?
|
| Is this guaranteed by FINRA/SIPC?
| nsenifty wrote:
| Do you help US-based investors with PFIC taxation (see Steps 4
| and 5 here)? (https://www.taxesforexpats.com/guides/passive-
| foreign-invest...).
|
| This is a huge pain point for US persons investing in foreign
| mutual funds. This made me liquidate all my ETFs/mutual funds in
| India and move the money to individual stocks or property.
|
| If you can make it easy for NRIs to invest in a basket of
| individual stocks, a NRI-friendly smallcase
| (https://www.smallcase.com/) if you will, that would be amazing.
| hemantgangolia wrote:
| Yes, we know about PFIC taxation and help investors with Mark-
| to-Market Accounting. Further, Inri provides tax support as
| part of the product offering, thereby abstracting the pain of
| tax reporting.
| nsenifty wrote:
| That's great! You should add that to your FAQs (spell it out
| specifically).
|
| How do you factor the US taxation at marginal rate (instead
| of the more favorable long term capital gain tax rate) factor
| into your ROI comparison between investing directly in India
| vs an US-based India fund (which enjoys all the tax
| benefits)?
| Yoric wrote:
| Since the target is Indian expats, that probably doesn't matter
| much, but be aware the name INRI has strong religious
| connotations in the West [1].
|
| [1] https://en.wikipedia.org/wiki/Jesus,_King_of_the_Jews#INRI
| eldavido wrote:
| First thought that entered my head as well.
|
| And it really is "the West" (not just US), since the original
| phrase is Latin.
| nelblu wrote:
| Hahaha! That would have never occurred to me (or at least not
| immediately) - NRI
| radicaldreamer wrote:
| What are the inflation adjusted returns for investments in the
| indian market? What are the tax implications?
| super256 wrote:
| Inflation adjusted NIFTY for 31. March 2023:
| https://www.tradingview.com/chart/NIFTY/p30N39p6-NIFTY-Infla...
| nish93 wrote:
| Indian indices have given 14-17% CAGR in the last 5 years.
| Inflation is around 6-7% (hard to cross verify since there's
| also a lag here).
|
| On tax, India and US (along with 80+ other countries) have a
| Double Tax Avoidance Agreement, so you dont get taxed twice.
| Local rules vary in terms of tax declarations though. E.g. In
| US, IRS mandates all foreign income to be declared. So you file
| capital gains taxes in India (online) and declare those in US
| while filing taxes here. We help with all the reporting here.
|
| More details in the article here -
| https://www.goinri.com/blog/tax-implications-for-nris
| the_girl wrote:
| But US Canada customers are not entertained by most mutual funds
| right?
| the_girl wrote:
| But US Canada investors are not entertained by Indian mutual fund
| houses right?
| nish93 wrote:
| Yes, not every fund house serves US / Canada residents and
| there are nuances in terms of which funds allow digital
| onboarding. But even after accounting for those rules, there
| are enough good performing funds available, which we have
| curated for the offering
| itissid wrote:
| Question: how do the rules introduced(https://sbnri.com/blog/nri-
| income-tax/union-budget-2023-for-...) in the Union Budget 2023
| for taxing outward remittances (i.e. on moving money from India
| to US) affect you?
| hemantgangolia wrote:
| The Liberalised Remittance Scheme is applicable to Indian
| residents and not Indian expats whereas Inri is an investment
| product for Indian expats remitting to India from a foreign
| country. https://m.rbi.org.in/scripts/FAQView.aspx?Id=115
| newhotelowner wrote:
| > Indian expats remitting to India
|
| But eventually I have to remit back my profit? I will be
| affected right?
| nish93 wrote:
| The outward remittance rules are a part of LRS (Liberalised
| Remittance Scheme) and applicable only for payments _from_
| Indian residents outside. Since repatriation in our case will
| be by NRIs themselves, through their NRE accounts, this doesn
| 't affect us.
| playingalong wrote:
| Watch out. You might get weird "looks" from Christians among your
| audience: Search keyword: "Iesus Nazarenus Rex Iudaeorum".
|
| (I don't think it's offensive or anything that level)
| cardosof wrote:
| I'm Christian and that's the first thing I noticed about the
| Url. "Go INRI? Cool" was my reaction.
| velavar wrote:
| This is awesome - exactly the thing I was looking for! Apologies
| if I missed it but what are the fees for using this service?
| joewadcan wrote:
| So like Vested?
| nish93 wrote:
| No, it's the reverse of Vested.
|
| Vested is for Indian residents to invest in US, we are for
| global NRIs to invest in Indian financial instruments.
| MuffinFlavored wrote:
| https://www.google.com/search?q=india+etf
|
| https://etfdb.com/etfs/country/india/
|
| Now granted, as far as I know, no major brokerage supports dollar
| cost averaging into an ETF (needs to be a mutual fund that trades
| once at close so you never get to benefit from any intraday
| volatility)
|
| which "moves the goalpost to"
| https://www.google.com/search?q=india+mutual+fund
|
| in fidelity, i can set up automatic investing / dollar cost
| averaging (wealthfront's entire business model, right?) into any
| mutual fund they allow access to. curious the advantages from
| your product over this.
| nish93 wrote:
| The major difference here is that you invest directly through
| your NRE/NRO bank account in India. This makes your investing
| more efficient, because you dont face the tracking errors and
| frequent currency transaction costs that funds abroad face. You
| can compare these with NIFTY growth % - USD/INR growth % - two-
| way currency transaction charges to confirm.
|
| This is a fair option for anyone who cant access the Indian
| markets directly, but for Indians with PAN card, the efficiency
| of investing directly is much higher.
|
| 2. Breadth of funds is still not as good as in the Indian
| market. India has 8000+ mutual funds listed, with specific
| allocations available to mid cap, small cap, thematic (tech vs
| pharma vs consumer vs infra), equity-debt hybrid etc.
|
| 3. We are starting with mutual funds but plan to offer all
| asset classes for investments including real estates.
|
| Also, DCA is just one part of Wealthfront, there are other
| advantages also, but that's a separate point.
| jacquesm wrote:
| Would it make sense to offer this to a wider audience? Why limit
| it to just Indian expats?
| newhotelowner wrote:
| I think you need a special bank account that is only available
| to Indians living outside and it's a nightmare to keep it
| active/open.
| [deleted]
___________________________________________________________________
(page generated 2023-03-31 23:00 UTC)