How to Invest in US Stocks from India – Step-by-Step Guide
Investing in US stocks from India has become increasingly popular as Indian investors seek global diversification. Companies like Apple, Tesla, Amazon, and Google offer tremendous growth potential. But how exactly can you invest in US stocks from India legally and efficiently? In this guide, we’ll cover everything you need to know, from regulations to the best platforms and tax implications.
1. Is It Legal to Investing in US Stocks from India?
Yes! The Reserve Bank of India (RBI) allows Indian residents to invest in foreign assets, including US stocks, under the Liberalized Remittance Scheme (LRS). You can invest up to $250,000 per financial year in international markets.
2. Different Ways to Investing in US Stocks from India
There are multiple ways to buy US stocks from India. Let’s explore the best options:
A. Investing Through Indian Brokers Offering US Stocks
Several Indian brokerage firms partner with US-based platforms to offer seamless international stock trading. Some popular options include:
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Zerodha (via Vested)
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Upstox
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Groww
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ICICI Direct
B. Direct Investment via US-Based Brokerage Accounts
You can also open an account with a US-based brokerage firm that allows Indian investors. Some of the top choices are:
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Interactive Brokers
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Charles Schwab
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TD Ameritrade
C. Investing via Mutual Funds & ETFs
If you prefer indirect exposure, consider investing in:
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US-focused mutual funds (e.g., Motilal Oswal S&P 500 Index Fund)
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International ETFs (e.g., Nasdaq 100 ETFs available in India)
3. Step-by-Step Process to Invest in US Stocks
Step 1: Choose a Brokerage Platform
Decide whether you want to invest through an Indian brokerage with US stock access or directly open an account with a US broker.
Step 2: Complete the Account Setup
Most platforms require: ✔ KYC documents (PAN, Aadhaar, Address Proof) ✔ Bank Account Details ✔ Income Proof (for some brokers)
Step 3: Fund Your Account (LRS Compliance)
Under RBI’s LRS scheme, you’ll need to transfer funds in USD using: ✔ Wire Transfer ✔ Bank Remittance (via authorized dealer banks)
Step 4: Start Investing
Once your account is funded, you can start investing in top US stocks like Apple, Amazon, and Tesla.
4. What Are the Charges for Investing in US Stocks?
While investing in US stocks is exciting, you should be aware of the associated costs:
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Brokerage Fees (Varies based on platform)
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Currency Conversion Fees (1-2% usually)
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Withdrawal Charges (If withdrawing funds back to India)
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Tax Deducted at Source (TDS) on Dividends (More on this below)
5. How Are US Stock Investments Taxed in India?
Investing in US stocks from India has tax implications:
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Capital Gains Tax:
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If held for less than 24 months – Short-term gains (taxed as per income slab)
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If held for more than 24 months – Long-term gains (20% with indexation)
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Dividend Tax: US deducts 25% TDS on dividends, which can be adjusted in India under the Double Taxation Avoidance Agreement (DTAA).
6. Advantages of Investing in US Stocks from India
✔ Global Diversification – Reduce risks associated with the Indian market. ✔ Access to High-Growth Companies – Invest in global giants like Apple, Amazon, Tesla, and Google. ✔ US Dollar-Based Wealth Creation – Protect your investments from INR depreciation. ✔ Fractional Investing – Buy shares of expensive stocks like Amazon for as low as $1.
7. Risks of Investing in US Stocks
⚠ Currency Fluctuations – INR-USD exchange rate impacts returns. ⚠ Regulatory Changes – RBI or SEBI might impose restrictions in the future. ⚠ Higher Taxation & Fees – Foreign investments come with additional costs.
8. Best US Stocks to Invest in From India (2024 Edition)
If you’re new to investing in US stocks, here are some strong picks:
🔹 Apple (AAPL) – Leading in innovation & technology. 🔹 Microsoft (MSFT) – A global tech giant. 🔹 Amazon (AMZN) – Dominating e-commerce & cloud computing. 🔹 Tesla (TSLA) – Leader in electric vehicles. 🔹 Google (GOOGL) – Top in digital advertising & AI.
Is Investing in US Stocks a Good Idea?
Yes, investing in US stocks from India is a great way to diversify your portfolio and gain exposure to the world’s largest stock market. By choosing the right platform, understanding the tax implications, and following legal guidelines, you can successfully invest in US equities. However, always assess the risks and consult a financial advisor if needed.
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