In today’s digitally connected and globalized financial environment, the interest in foreign investment has risen sharply among Indian investors. One of the most popular trends is the desire to invest in US stocks from India, a move that opens up access to high-performing global companies and offers geographic diversification. This article serves as a comprehensive guide for Indian investors interested in understanding how to invest in US stock market from India, covering the process, benefits, compliance, and practical tips.
Why Should You Invest In US Stocks From India?
There are several compelling reasons to explore international diversification through the US stock market:
1. Exposure to Global Leaders
The US stock market is home to some of the most dominant and innovative corporations in the world—companies with global business models, steady growth, and brand recognition. Even though these names are well-known in India, many are not listed on Indian exchanges. Investing in the US market provides direct ownership opportunities in these companies.
2. Portfolio Diversification
When you invest in US stocks from India, you reduce overdependence on domestic market performance. By allocating part of your investment to global markets, you diversify against regional economic cycles and country-specific risks.
3. Currency Advantage
Investing in assets denominated in USD provides a hedge against the depreciation of the Indian Rupee. Over time, if the INR weakens relative to the USD, your investment value could increase when converted back to INR.
4. Participation in Innovation-Driven Sectors
The US market is rich in high-growth sectors like Artificial Intelligence, Cloud Computing, Electric Vehicles, and Biotechnology—segments where Indian markets may not offer as much depth.
Understanding the Legal Route: LRS Compliance
To facilitate international investments, the Reserve Bank of India (RBI) allows individuals to remit money abroad under the Liberalised Remittance Scheme (LRS).
- Under LRS, a resident Indian can remit up to USD 250,000 per financial year for investments abroad.
- This includes purchasing stocks, ETFs, or other financial instruments listed on global exchanges like NYSE or NASDAQ.
You must comply with LRS protocols when transferring funds, and these remittances must be made through authorized dealers (banks) in India.
Step-by-Step: How To Buy US Stocks From India
Step 1: Choose the Right Investment Platform
To invest in US stocks, you’ll need a platform that supports international equities. While there are multiple options, one such platform that facilitates this is Vested Finance, which is designed to simplify US stock investments for Indian investors.
Vested Finance allows you to:
- Open an account digitally
- Invest in both full and fractional US stocks
- Comply with LRS directly within the platform
✅ No need to create a US bank account separately
Step 2: Complete KYC
Submit the following for account opening:
- PAN card
- Aadhar or passport (as ID proof)
- Bank account details
- LRS declaration form
Most platforms complete this process digitally in 24–72 hours.
Step 3: Fund Your USD Wallet
To fund your account, remit money via your Indian bank under the LRS route:
- Wire transfers (SWIFT)
- Authorized banking partner integration
Be aware of:
- Currency conversion charges
- Transfer charges from banks
- Documentation requirements under FEMA and RBI
Step 4: Begin Investing
Once your USD wallet is credited:
- Log in to the investment platform
- Search and select US stocks or ETFs
- Buy full or fractional shares based on your budget
Platforms like Vested Finance also offer curated portfolios (Vest) for specific themes or risk levels.
What Assets Can You Invest In?
You can access a broad range of financial instruments, such as:
- Individual Stocks: Buy shares of companies like Alphabet, Microsoft, or Tesla.
- ETFs: Diversified funds tracking major indices (e.g., S&P 500, NASDAQ-100).
- REITs: Real Estate Investment Trusts that invest in US commercial properties.
Fractional investing allows you to buy even high-priced stocks like Amazon with small amounts.
Taxation of US Stock Investments
1. Dividend Income
- Taxed at a flat rate of 25% by the US government before it’s credited to your account.
- India has a Double Taxation Avoidance Agreement (DTAA) with the US.
- You can claim tax credit when filing your income tax in India using Form 67.
2. Capital Gains
- Short-Term Capital Gains (STCG): If sold before 24 months; taxed as per your income slab.
- Long-Term Capital Gains (LTCG): Held for more than 24 months; taxed at 20% with indexation.
Note: You’re only liable to pay capital gains tax in India—not in the US.
Charges & Fees
When you invest in US stocks from India, be mindful of these costs:
- Currency Conversion Fees: 0.5%–2% depending on the bank
- Wire Transfer Fees: Usually INR 500–1,000 per transaction
- Platform Fees: May vary (some offer zero commission, others have monthly/annual charges)
- Withdrawal Charges: Fees to repatriate funds to India
Key Considerations Before You Start
✔ Currency Fluctuations
Fluctuations in the USD-INR rate can affect your overall returns. A depreciating INR benefits your investment, while an appreciating INR can reduce profits.
✔ Market Hours
US stock exchanges operate between 9:30 AM – 4:00 PM EST (which is 7:00 PM – 1:30 AM IST). Trading happens overnight in India, so consider your convenience and strategy.
✔ Regulatory Awareness
Stay updated with any changes in RBI regulations, taxation rules, and platform compliance.
Conclusion
To invest in US stocks from India, you don’t need to be a seasoned trader or an institutional investor. With access to digital platforms, clear regulatory pathways like the LRS, and streamlined KYC procedures, cross-border investing has become more accessible than ever.
Choosing a compliant, trustworthy platform like Vested Finance and understanding taxation and currency exposure will empower you to navigate the global markets efficiently. By allocating a portion of your portfolio to high-growth sectors and stable US companies, you can unlock new investment horizons and protect your capital from domestic volatility.
For any Indian retail investor seeking global diversification, now is a great time to act. So take your first step, fund your global wallet, and invest in US stocks with a long-term perspective.
