Are you thinking about investing in U.S. stocks? Here’s what you need to know as an Indian investor. In 2024, the Indian stock market outperformed major global investment options, including U.S. stocks, precious metals, and government bonds. 

Despite this, the U.S. market remains an attractive option for Indian investors.

You probably want to buy shares in companies like Apple or Google. The US stock market offers this option. For Indian investors, this means access to global industry leaders and new investment opportunities not found at home.

Investing in US stocks can help you spread risk and access different types of companies. This creates more ways to grow your wealth. Here’s how to invest in US stocks from India.

Direct Investment Options 

Using Domestic Brokers with US Partnerships

Major names like ICICI Direct, HDFC Securities, and Kotak Securities now work with US platforms to help you access the US market. Getting started is simple. 

To open an overseas trading account, submit your PAN card, passport, and proof of address. Some brokers require additional documents, like bank statements. 

After approval, you can send money to your trading account using the RBI’s Liberalized Remittance Scheme (LRS). This is the official way for Indians to send up to $250,000 annually abroad.

Here’s the upside: 

• support in your language, 
• familiar trading platforms, and 
• helpful customer service. 

But there are trade-offs too. 

You’ll have fewer stocks to choose from, pay higher fees, and face slower trade times. 

This means, if you buy ₹10,000 worth of stocks through ICICI Direct, you’ll pay ₹100 as fees. The choice comes down to what matters most: convenience or costs.

Opening Accounts with Foreign Brokers

Global brokers like Charles Schwab and Interactive Brokers offer a direct path to US markets. These platforms charge less, which is why experienced investors use them.

Opening an account is straightforward—fill out an online form and verify your identity and address. To start, be prepared to deposit between $1,000 and $10,000.

Foreign brokers like Interactive Brokers cost less — you’ll pay half a cent per share instead of the higher fees Indian brokers charge. But watch out for the costs of changing rupees to dollars and sending money abroad. 

Remember that dollar-rupee changes will affect your returns. Foreign brokers offer more stock options and lower fees. But they follow US rules instead of Indian ones.

Investing through Mobile Apps

Investment apps Appreciate, Vested, and Groww now make US stock investing easier for everyday investors. 

Getting started is straightforward: 

• download an app, 
• verify your identity, and 
• connect your bank account. 

You can begin with just $1.

These apps offer several advantages. Their simple design lets new investors buy and sell stocks easily. The low investment requirements make the US stock market available to more people.

However, there are some things to consider. Make sure the app has strong security features like encryption and two-factor authentication. These apps might not have all the advanced tools that traditional brokers offer. 

NSE IFSC Exchange

Did you know? The NSE IFSC in Gujarat’s GIFT City lets you trade U.S. stocks during Indian market hours.

How does it work?

• Open a digital trading account (called a Demat account) with a registered broker. This account holds all your stocks electronically instead of physical certificates.
• Trade popular U.S. stocks like Apple, Amazon, and Tesla using Indian rupees.

Why choose this?

• No need for currency conversion or overseas accounts.
• Lower transaction costs.
• Indian regulatory oversight.

But here’s the drawback:

• Fewer stock options.
• Lower trading volumes.

This is a solid option if you want to avoid currency-related complexities.

Indirect Investment Options

US-Focused Mutual Funds

US-focused mutual funds offer Indian investors an easy way to invest in American companies. The Edelweiss US Technology Fund and Motilal Oswal S&P 500 Index Fund are two popular options.

These funds offer key benefits. Instead of putting all your money in one company, these funds buy shares in multiple different companies. Professional managers handle all the investment decisions. You can invest in Indian rupees, and starting amounts are reasonable.

However, there are some drawbacks. These funds might not grow as much as individual stocks, especially in strong markets. Your returns depend on how well the fund manager performs. The fees can also reduce your profits over time.

Also Read : How To Do Forex Trading in India?

Exchange-Traded Funds (ETFs)

ETFs offer you another way to invest in US markets. Two popular options are the Motilal Oswal S&P 500 ETF and Nippon India ETF Hang Seng BeES. Think of ETFs as mutual funds that you can buy and sell instantly during market hours, just like regular stocks.

ETFs have several advantages. They cost less to own than mutual funds – the Motilal Oswal S&P 500 ETF charges just 0.49% yearly. You can buy and sell them anytime during market hours. They spread your money across many companies, reducing risk. 

There are some drawbacks to consider though. You’ll pay trading fees when buying or selling. They might not perfectly follow the market they’re tracking. For example, if the U.S. market goes up 10%, your ETF might go up 9.8% instead of exactly 10%. 

Which Should You Choose?

Both options have their benefits. However, choose mutual funds if you want a hands-off approach. 

Pick ETFs if you want lower costs and more trading flexibility. Ultimately, your choice depends on your goals and how involved you want to be.

What You Need To Know Before Investing

Before investing in US stocks, understand these two key points:

Tax rules are critical, too. How long you keep your stocks affects your taxes:

• Sell before 2 years: Pay tax based on your tax bracket (the percentage of tax you normally pay based on your yearly income)
• Keep longer than 2 years: Pay 20% tax

Watch out for extra costs. When the rupee gets weaker against the dollar, you might make more money on your US investments. You’ll pay fees for:

• Brokerage services
• Wire transfers ($10 to 50 per transfer)
• Currency conversion fees — banks charge extra (usually 1-3%) on top of the actual dollar-rupee exchange rate

Plan carefully to manage these costs and maximize your returns.

Getting Started with Your Investment

Choose An Investment Method

Investing in US stocks from India is easier when you understand your options. You can invest in two main ways:

Direct investing lets you buy specific stocks yourself. You can use:

• Indian brokers like ICICI Direct and HDFC Securities
• Foreign brokers like Interactive Brokers
• Mobile apps like Vested and Groww

Indirect investing lets professionals manage your money through:

• US mutual funds like Motilal Oswal S&P 500 Index Fund
• ETFs like Motilal Oswal S&P 500 ETF

New investors with limited time prefer indirect investing through mutual funds or ETFs. These require less research and management. Experienced investors who want to choose specific stocks might prefer direct investing through a broker.

Choose the method that matches your time, knowledge, and investment goals.

Select a Broker or Platform

After deciding how you want to invest, choose a broker or platform that works best for you.

Compare these critical features between platforms:

Check all fees carefully. Interactive Brokers charges $0.005 per share, while ICICI Direct takes 1% of each trade. Look for helpful tools like customer support, research resources and trading features. 

For beginners, mobile apps like Vested are easy to use. More experienced investors might prefer platforms like Charles Schwab that offer advanced features.

Think about what matters most to you. Interactive Brokers could work well if you want low fees and many stock options. If you prefer working with an Indian company, HDFC Securities might be better.

Setting Up Your Account

Opening your investment account requires a few key steps. First, pick the broker or platform you want to use based on your research.

Next, get these ready before you start:

• Your PAN card
• Passport
• Address proof (like electricity bill)
• Recent bank statements

You’ll also need to verify your identity. Most platforms do this through a video call or in-person meeting. This step is required by law to prevent fraud.

The approval process varies by platform. It can take anywhere from a few days to two weeks before you can start investing.

Also Read : Role and Regulation of Forex Brokers in India

Fund Your Account

After your account is approved, you can add money. Remember, India allows you to invest up to $250,000 overseas each year.

To transfer money, use your bank’s online banking. You must enter your broker’s bank details, including their SWIFT code — a unique ID number that banks use to send money internationally — and account number. Your money will reach your US account in about 2 to 5 days.

Keep in mind two primary costs:

• Banks add extra charges to exchange rates
• Wire transfer fees cost between $10 to $50

Compare rates between banks to save money. 

Start Investing in US Stocks

Once your account has money, you can start investing, but you need a clear plan first.

Before buying any stocks or funds, research them thoroughly using financial news and analyst reports. To lower your risk, spread your money across different types of companies. 

For example, you might mix technology stocks with healthcare and consumer goods companies.

Start small — maybe ₹5,000 or ₹10,000 — until you get comfortable with how US stocks work. Check your investments regularly and adjust them based on market changes and your goals.

For your first investment, consider stable companies like Apple or Microsoft. You can also choose an S&P 500 fund, which invests in 500 major US companies.

Final Thoughts

If you want to invest in US stocks, here are your options. As an Indian investor, you have many ways to invest — from using brokers to buying mutual funds. Each option offers unique access to major global companies and new growth opportunities. So, do your homework on taxes and rules, pick the best method, and remember to start small. Choose your investment path and build your global portfolio today.