If you merely want to invest in the Nasdaq market as a whole, you can do so through mutual funds and exchange-traded funds (ETFs) listed in India. These funds make investments in Nasdaq-listed firms in exchange for a management fee. It has limited flexibility for serious investors. Domestic funds significantly underperform US-listed ETFs due to excessive fees, insufficient liquidity, and tracking errors.
Is it possible to invest in US equities from India?
Investing in Nasdaq-based Indian ETFs or mutual funds with US exposure may be a preferable option in such instances. Trading on US stock exchanges is simple, and most brokerage firms allow you to participate in US stocks. Individuals can invest up to $250,000 in foreign currency each year with the Reserve Bank of India.
What are my options for investing in international ETFs from India?
1) Is it possible for me to invest in international equities from India?
Yes, international equities can be purchased from India. On the US/foreign stock exchanges, global companies such as Apple, Amazon, Microsoft, Google, Tesla, and others are listed, and Indians can lawfully buy foreign equities.
An Indian resident can send up to USD $250,000 abroad each year without requesting RBI approval, according to the RBI’s Liberalized Remittance Scheme (LRS) guidelines. The LRS has simplified the process of investing in other countries for Indian citizens.
2) What is the most straightforward method of investing in international stocks?
You can invest in international stocks from India by creating an account with an Indian broker who allows foreign stock investments or has a relationship with overseas brokers. Otherwise, you can open an account with a foreign stockbroker, such as Interactive Brokers, TD Ameritrade, Webull, Charles Schwab International Account, and so on, and begin investing in international equities right away.
Another simple option to invest in overseas equities is through mutual funds, which allow investors to purchase Indian mutual funds or exchange-traded funds (ETFs) with worldwide equity holdings.
3) Is it legal for me to invest in foreign stocks?
Yes, you can invest in international equities. The Liberalized Transfer Scheme (LRS), established by the RBI, is a set of policies that control the maximum amount and purpose of remittance. An Indian resident can transmit up to USD $250,000 abroad each year under the LRS. In a nutshell, you can invest in and own multinational firms and stocks.
4) What are my options for investing in Nasdaq from India?
Nasdaq is a New York-based American stock exchange. From India, Indians can invest in Nasdaq-listed companies. The Nasdaq Composite, an index comprising over 3,000 firms listed on the Nasdaq Exchange that includes Apple, Google, Microsoft, Meta (previously Facebook), Amazon, and Intel, among others, is also known as “Nasdaq.” From India, investors can invest in Nasdaq.
5) Do you have the ability to purchase equities listed in other countries?
Yes, you can invest in stocks listed in nations such as the United States, South Korea, Australia, Japan, and Europe. Other countries’ stock markets, such as Nasdaq, Tokyo Stock Exchange, Korea Exchange, Euronext, and others, have thousands of stocks listed. Stocks listed on other nations’ stock markets are available to Indian investors.
6) How can Indians invest in international stocks?
You can invest in international equities from India by creating an account with an Indian broker who allows foreign stock investments or has a tie-up with overseas brokers, directly with foreign stockbrokers, or through a global mutual fund method.
7) What are the different types of foreign stock brokers in India?
Interactive Brokers, TD Ameritrade, Charles Schwab International Account, Webull, and other leading international brokerage firms allow Indian individuals to open accounts and trade in US stocks. Furthermore, many Indian stockbrokers, such as ICICI Direct and Kotak Securities, have partnered with foreign brokers to ease international investing.
8) How much does foreign stock taxation cost?
Long-term capital gains deriving from the sale of foreign equities are taxed at a rate of 20% plus surcharge and health and education cess, plus the advantage of indexation, when invested in foreign stocks. Short-term capital gains from the sale of overseas shares, on the other hand, are taxed at the taxpayer’s slab rate.
10) Can I trade foreign stocks on an intraday basis?
Several brokers and startup apps allow Indians to invest in overseas companies. However, due to regulatory considerations, most international equities do not have an intraday trading facility. You will need an overseas trading account to conduct intraday trading.
Can non-US residents invest in ETFs?
A small number of American brokers are still interested in and willing to work with Americans living in other countries. This is especially true if they are accompanied by a trained independent financial advisor who can perform additional due diligence on the client.
While American mutual funds may no longer be offered to Americans living abroad, Exchange Traded Funds (ETFs) are normally available to non-residents (with the exception of EU residents, discussed below). Traditional mutual funds do not offer the same level of diversification as well-designed ETF portfolios. Furthermore, ETFs are often more tax and cost efficient than traditional mutual funds, in addition to being exempt from various regulatory restrictions. As a result, lack of mutual fund access should no longer be considered a key barrier to effective expat investing.
The EU Markets in Financial Instruments Directive (MiFID II) of 2018 prohibited the distribution of US-registered funds in the EU, including ETFs. The majority of US brokers still working with EU clients have responded by barring them from buying US funds, including ETFs. Some US brokers, however, continue to enable ETF distribution to EU citizens if the funds are managed by a US Registered Investment Advisor.
Non-residents can also invest in individual stocks and bonds to create their portfolios.
Although this technique has higher expenses and inhibits an investor’s ability to attain maximum diversification efficiency, it is the approach with the least amount of cross-border regulation.
Finally, it should be highlighted that for many Americans living overseas, the ideal solution is to keep their primary address in the United States.
Any American living overseas, even for a short time, has every right to use a U.S. address for the purposes of opening accounts and receiving mail.
There will be no restrictions on the account in this situation.
How can I invest in the New York Stock Exchange from India?
There are two ways to invest in US stocks from India. One is to invest directly in the US market through a brokerage app like Cube, which allows you to do so from India. The second is through mutual funds.
Brokerage App
To trade US equities from India, you’ll need the assistance of a broker. You’ll need to open a trading account with a brokerage firm and complete your KYC by providing your PAN, bank account, voter ID, bank statement, and other information.
After that, you’ll need to deposit funds into your account in order to trade equities in the United States. Keep in mind that through the RBI’s Liberalized Remittance Scheme, you’ll be allowed to invest in US stocks from India (LRS).
To guarantee that you’ve followed the RBI’s LRS guidelines, you’ll need to go through some formalities. The LRS permits you to invest up to $250,000 in US markets from India each financial year.
Mutual Funds
International funds are a different method to include US companies in your portfolio. They eliminate the need for LRS formalities and are available on apps such as Cube.
In a nutshell, foreign funds are similar to other mutual funds in that they allow you to invest in them. There are tradeoffs to be made. The possible profits you can make, for example, will be in line with the fund’s risk profile.
To have a better understanding of the general situation, read our story on How to Invest in the United States from India.
Is it possible to purchase ETFs with Zerodha?
ETFs on Zerodha: Zerodha offers every customer a fantastic opportunity to purchase and sell ETFs using our trading platform, lowering costs and improving profits. This means that once an ETF is purchased, it is transferred on a T + 2 basis to the customer’s demat account.
Is it possible to buy Apple stock on Zerodha?
No, at this time, Zerodha does not allow you to invest in stocks listed on foreign stock exchanges. International mutual funds are the simplest method to invest in US firms such as Apple, Google, Facebook, and Amazon, or just have some exposure to worldwide markets.
How can I purchase shares in the United States?
To assist you in purchasing your first stock, follow these five steps:
- Make a decision on an internet stockbroker. An online stockbroker is the most convenient way to purchase stocks.
How do I open a demat account in the United States while living in India?
Follow the steps outlined below.
- Submit your KYC documents, which include your PAN card and a proof of residency, such as a voter ID card or the most recent bank statement.