Why More Indians Are Looking West to Invest
Investing in US stocks from India is no longer reserved for the ultra-wealthy. With global tech giants like Apple, Microsoft, and Tesla dominating innovation—and the US market making up nearly 40% of global capitalization—Indians are increasingly diversifying their portfolios overseas.
Beyond the appeal of iconic companies, US stocks offer liquidity, dividends, global exposure, and even a natural hedge against a weakening rupee. For those looking to expand beyond Indian equities, this is a practical gateway to wealth creation.
In this Article
Legal Framework You Should Know
Thanks to the RBI’s Liberalized Remittance Scheme (LRS), Indian residents can legally invest up to $250,000 per financial year in foreign assets, including equities. To start, you’ll need to provide your bank with Form A2, a self-declaration, and choose the correct remittance code (usually S0001 for equity).
Also Read:Investments That NRIs Should Avoid: A Strategic Guide to Smarter Financial Choices
Important compliance reminders:
- Dividends from US companies attract 25% withholding tax, but you can claim credit under the India-US tax treaty.
- Capital gains from selling US stocks are not taxed in the US but are taxable in India—short-term gains at slab rates and long-term at 20% with indexation.
Different Ways to Invest in US Stocks
| Method | Minimum Investment | Ease of Use |
|---|---|---|
| Indian Brokers (e.g., Groww) | ₹100 – ₹500 | Very Easy |
| Direct US Brokers (e.g., Schwab) | $1 – $10 | Moderate |
| Mutual Funds/ETFs | ₹500 – ₹1,000 | Easy |
| Fractional Shares | ₹100+ | Great for Starters |
- Via Indian Brokers
Platforms like Groww, Zerodha, and ICICI Direct now offer access to US equities. Transactions happen in INR, and onboarding is simple. - Via Direct US Brokers
Opening an account with Fidelity, TD Ameritrade, or Charles Schwab gives you full access to the US stock market. But expect more paperwork and W-8BEN filing for tax purposes. - Mutual Funds and ETFs
Funds like Motilal Oswal Nasdaq 100 ETF or ICICI US Bluechip Fund give you access to top US companies without needing to select individual stocks. - Fractional Investing
Want to own a slice of Amazon or Tesla for ₹500? Many platforms now allow you to buy fractional shares, making high-value stocks accessible to everyone.
Step-by-Step Guide to Get Started
- Choose your investment method. Start with Indian platforms for ease.
- Complete KYC: PAN, Aadhaar, income proof, and bank details.
- Remit funds under LRS: Submit Form A2 and select the correct purpose code.
- Start investing: Begin with large-cap, stable companies or index ETFs like SPY or QQQ.
- Track your portfolio and file taxes. Maintain records for compliance and income tax filing.
Pro Tip: Diversify with index funds before exploring individual stocks.
Check Out: Debt Mutual Funds for NRIs: A Smart and Safe Investment Choice for Global Indians
Tax Implications You Must Understand
| Tax Type | India | United States |
|---|---|---|
| Capital Gains | Taxed as per holding period | Not taxed for non-residents |
| Dividends | Taxed at slab rate (after credit) | 25% TDS, claimable under treaty |
| Filing Requirement | Required for foreign holdings | No return unless income is taxable |
- Form 15CA/15CB may be needed if your foreign investments exceed ₹10 lakh.
- Always maintain currency conversion records for accurate reporting.
Common Mistakes to Avoid
- Going all-in on trending stocks like Tesla or Nvidia without diversification.
- Ignoring time zone differences, leading to bad execution prices.
- Overlooking tax compliance, resulting in audit risks.
- Trying to time both currency and market, which rarely works.
Remember: Long-term consistency beats short-term speculation.
Risk Management and Portfolio Strategy
Diversification is key when investing in US stocks from India. Avoid concentrating only on tech. The US market offers access to sectors underrepresented in Indian markets, such as aerospace, healthcare, and consumer goods.
Currency fluctuations can impact INR returns. A stronger dollar boosts your returns in rupee terms. But a weaker dollar can cut into your gains. Keep this in mind when investing.
Start with 10 to 20 percent of your total portfolio in US equities. Track your performance regularly, but don’t obsess over daily price changes.
Lessons from Experience
Many investors start with direct US brokers and quickly feel overwhelmed by forms, tax paperwork, and dollar-rupee conversions. Simpler platforms in India offering US exposure can make the process much easier.
Starting with index-based ETFs helps reduce risk. As confidence grows, investors can shift into individual stocks. Having global investments has helped many balance their portfolios during Indian market volatility.
The Future of US Investing for Indians
International investing is getting easier with more Indian platforms entering the market. Fractional investing and zero-brokerage accounts are becoming common. Automated tax reports are reducing compliance headaches.
The RBI may raise the LRS cap soon, encouraging even more Indians to explore global markets. Fintech tools are also making it easier to monitor and manage overseas portfolios in real-time.
A Smart Global Investing Move
Learning how to invest in US stocks from India is a strategic way to diversify and grow your portfolio. With proper tools, platforms, and understanding of tax regulations, even small investors can benefit from Wall Street’s long-term potential.
Don’t wait for perfect conditions. Start small, stay informed, and build experience. US stock investing isn’t just for the elite anymore—it’s for anyone ready to think globally and act wisely.
