Cross-Border Investing: Buying US Stocks from India Made Easier in 2025

India's stock exchanges—NSE (National Stock Exchange) and BSE (Bombay Stock Exchange)—are well-known platforms where investors can trade Indian equities. But what if you want to diversify beyond the Indian markets? Investing in US stocks offers Indian investors an excellent opportunity to diversify their portfolios geographically, gain exposure to global market leaders, and potentially enhance returns.

Can Indians Invest in the US Stock Market?

Yes, Indian investors can invest in the US stock market. You have multiple routes to add US equities to your portfolio, including direct investment, mutual funds, and exchange-traded funds (ETFs).

Types of Investing in US Stocks

Broadly, investing in US stocks from India can be done in two ways:

• Direct Investment: Buying individual US stocks directly.

• Indirect Investment: Investing through mutual funds, ETFs, or other financial products linked to US markets.

Direct Investment Options to Buy US Stocks from India

1. Global Trading Account with a Domestic Broker

Many Indian brokerage firms have tie-ups with US brokers and provide international trading accounts. You can open a global trading account with these domestic agents, allowing you to trade on US exchanges like NYSE and NASDAQ.

• Documentation: You will need to submit KYC documents, PAN, proof of address, and other regulatory documents.

• Restrictions: Brokers may limit the types of stocks you can buy or the number of trades you can execute.

• Costs: Brokerage fees and currency conversion charges apply.

2. Overseas Trading Account with a Foreign Broker

Alternatively, you can open an account directly with a foreign broker that has an Indian presence or allows Indian clients.

• Considerations: Understand the terms, fees, and service quality.

• Cost Factor: Foreign brokerage fees and currency exchange costs can add up, so research carefully.

Note: Direct investment often involves higher costs due to brokerage fees and currency conversion charges.

Indirect Investment Options

1. Mutual Funds

Some Indian mutual funds offer international investment schemes focusing on the US market or global indices. These funds invest in US stocks on your behalf, making it easier for retail investors.

• Pros: Professional management, diversified exposure.

• Cons: Management fees, indirect control.

2. Exchange-Traded Funds (ETFs)

ETFs are traded like stocks on exchanges and provide a convenient way to invest in US indices such as NASDAQ or S&P 500. You can buy ETFs through your Indian demat account or via an international broker. Some ETFs focus exclusively on US stocks, making them a straightforward way to gain US market exposure.

3. Investment Apps

Several fintech startups have launched apps that simplify investing in US stocks from India. These apps facilitate easy account setup and trading but may have limitations due to regulatory restrictions, such as prohibiting intraday trading in US markets.

New Option: Buying US Stocks on NSE IFSC Exchange

The NSE International Financial Service Centre (IFSC) Exchange, located in GIFT City, Gujarat, has introduced a platform to trade US stocks directly from India.

• Launch Date: March 3, 2022.

• Available Stocks: Currently, 8 major US stocks like Microsoft, Apple, Amazon, Netflix, Walmart, Alphabet (Google), Meta Platforms (Facebook), and Tesla.

• Future Plans: The list will expand to 50 US stocks gradually.

• Trading Hours: 2:30 PM to 8 PM IST, matching NYSE hours.

• Account Requirements:

  • You cannot use your regular domestic Demat account.

  • You must open a separate Demat and trading account with a broker registered with NSE IFSC.

  • Funds must be transferred in USD after currency conversion from your Indian bank account.

Charges Involved in Investing in US Stocks from India

1. Tax Collected at Source (TCS)

• Rate: 20% on remittances exceeding ₹7 lakh under RBI’s Liberalised Remittance Scheme (LRS) from October 1, 2023.

• Refund: TCS is adjustable while filing Income Tax Returns (ITR).

2. Capital Gains Tax

• Short-Term Capital Gains (STCG): Stocks held for less than 24 months are taxed as per your income tax slab.

• Long-Term Capital Gains (LTCG): Stocks held for more than 24 months are taxed at 20%.

3. Dividend Tax

• US Withholding Tax: 25% withholding on dividends.

• DTAA Benefits: Under India-US Double Taxation Avoidance Agreement (DTAA), you can claim credit for taxes paid in the US against your Indian tax liability.

4. Bank Charges

• Foreign exchange conversion fees (up to 2%).

• Transfer fees for overseas fund transfers.

• Possible account setup fees.

5. Brokerage Fees

• Vary widely — could be flat fees or a percentage of the trade value.

• Always check the fee structure before investing.

6. Foreign Exchange Rate Impact

• Currency fluctuations affect your purchase cost and returns.

• INR depreciation against USD could enhance returns but increase initial investment costs.

Why Invest in US Stocks?

• Diversification: Reduces reliance on Indian market volatility.

• Historical Performance: US markets have outperformed Indian markets with comparatively lower volatility.

• Access to Global Leaders: Companies like Amazon, Apple, Tesla, and cutting-edge startups in AI and technology.

• Currency Gains: Potential profits from USD appreciation against INR.

Choosing the Right Investment Approach

Choosing the Right Investment Approach

• Direct Investments: Greater control but requires market understanding and regulatory compliance.

• Mutual Funds/ETFs: Passive, diversified, and professionally managed options suitable for most retail investors.

• Investment Apps: User-friendly with some limitations; ideal for beginners but verify platform credibility and fees.

Important Tips for Indian Investors

• Monitor forex rates regularly — currency fluctuations can significantly impact returns.

• Consult tax professionals to navigate DTAA benefits and comply with Indian tax laws.

• Ensure your chosen investment method aligns with RBI and SEC regulations.

• Align your investment choices with your risk appetite and financial goals.

Investing in US stocks from India offers tremendous opportunities for portfolio diversification, access to world-leading companies, and potential growth. However, investors must navigate costs such as taxes, brokerage fees, currency conversion charges, and comply with regulatory frameworks.

Whether you choose direct investments via global accounts, mutual funds, ETFs, or the NSE IFSC exchange, understanding the nuances and planning carefully will help maximize your benefits while managing risks.

If you're ready to expand your investment horizons beyond Indian markets, now is a great time to explore US stock investments — just be sure to stay informed, compliant, and aligned with your financial goals.

With inputs from agencies

Image Source: Multiple agencies

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