How to invest in US Stocks form India

How to Invest in US Stocks from India in 2025 – The Opportunities and Risks You Must Know

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Curious about how to invest in US stocks from India in 2025? This simple guide explains everything, from platforms to taxes — without any unnecessary complications.

Why Indians Are Investing in US Stocks?

In this era of information and technology, success and growth story of US tech giants like Apple, Google, Microsoft and Nvidia is hard to ignore. If you’ve ever wanted to buy shares of these companies, you’re not alone. More and more Indians are investing in the US stock market to diversify their portfolio, gain exposure to global tech giants, and benefit from the strength of the US dollar.

But the big question remains:

How can someone from India legally and easily invest in US stocks?

Let’s break it down step by step without the financial mumbo jumbo.

Investing in equity itself is a risker option if not done correctly. When it comes to foreign equity it becomes slightly more tricky. People are more concerned about the legal compliances part. But wait , its not that complicated. It’s completely legal for Indians to invest in US stocks. Indians can invest up to $250,000 per financial year under the Liberalised Remittance Scheme (LRS) by the Reserve Bank of India (RBI). This money can be used to invest in- US stocks, ETFs (Exchange-Traded Funds) and also US mutual funds. But you must go through legal, RBI-compliant platforms.

Regulatory Cap on US Stocks & ETFs for Indian Investors

Instead of buying directly, Indians can invest in mutual funds or ETFs listed in India that put money into US markets (e.g., Nasdaq 100 funds). However, SEBI has set additional caps for fund houses:

  • $7 billion industry-wide limit for international mutual funds.
  • $1 billion limit for international ETFs.
  • An individual cap of $1 billion for each Asset Management Company on their total overseas investments.

This means sometimes fund houses temporarily stop fresh investments in US-focused funds (this happened in 2022 and 2024 when the limits were hit). These are AMC-level caps, not individual investor caps. But they affect you because you may not always be able to invest when limits are breached.

Here is a simple Step-by-Step Guide on How to Start Investing US Market:

  • Choose the Right Investment Platform. Several platforms allow you to invest directly in US stocks from India. Platforms like INDmoney may charge a nominal commission. Apps like Vested offer the benefits of thematic portfolios and a user-friendly interface. On the other hand, Groww provides tools to screen and filter US ETFs, which can also be used to invest in the US market.
  • Complete your KYC (Know Your Customer)

You’ll need:

  1. PAN card
  2. Aadhaar card
  3. Bank account (linked for fund transfer)
  4. Mobile number
  5. Bank statement or ITR acknowledgement

This usually takes just 24–48 hours.

Fund Your US Investment Account

Once KYC is done:

  1. You initiate a bank transfer in INR.
  2. The platform converts INR to USD.
  3. Funds appear in your US brokerage account.

Platforms often use licensed forex partners like Wise or BookMyForex for the conversion.

What to Buy – US Stocks or ETFs?

Indian investors looking to diversify globally often face this dilemma. Should I invest in individual US stocks (like Apple, Tesla, Amazon) or in US ETFs such as S&P 500 or Nasdaq 100?

Here’s a breakdown :

US Stocks:
Buying ownership in a single company listed on a US exchange (e.g., Apple, Microsoft).

US ETFs:
A basket of securities that tracks an index. For example, S&P 500

Pros of Investing in US Stocks:

  1. Potential for high returns if you pick winners.
  2. Direct exposure to innovation-driven companies not listed in India.
  3. Can build a customized portfolio (choose sectors you believe in).
  4. Option to buy fractional shares make even expensive stocks accessible.

Cons of US Stocks:

  1. High risk – depends on the performance of a single company.
  2. Requires deep research & monitoring (earnings, competition, regulations).
  3. Currency risk (INR vs USD) adds volatility.
  4. Overexposure possible if you chase trending stocks.

Pros of Investing in US ETFs:

  1. Diversification – one ETF gives exposure to 50–500+ companies.
  2. Lower risk compared to individual stocks.
  3. Passive investing – no need to track every company.
  4. Ideal for long-term wealth creation (mirrors index growth).
  5. Often lower expense ratio than mutual funds.

Cons of US ETFs:

  1. Returns are market-average, not extraordinary.
  2. Some popular US ETFs may not be directly available on Indian platforms.
  3. Currency fluctuations still affect returns.

Which one is the better option?

Choose US Stocks if:

  1. You want to bet on specific companies you believe in.
  2. You can research, track quarterly results, and handle higher risk.
  3. You are okay with short-term volatility for long-term potential big gains.

Choose US ETFs if:

  1. You want diversification and stability.
  2. You are a beginner or passive investor.
  3. You’re investing for the long term (5–10 years).
  4. You prefer steady, consistent returns over risky bets.

If you are a beginner it’s better to start with US ETFs for stability and diversification. When you gain experience as an investor and want to chase big opportunities then start adding a few US stocks in your portfolio.

Important: Fractional investing is allowed. So you can buy just 0.1 shares of Apple if you want!

Track Your Portfolio

You will be able to see live performance of your investments, USD- INR value of your holdings and also tax reports (some offer downloadable reports for ITR filing).

What About Taxes?

Here’s what you need to know as an Indian resident:

Now here is the tricky part, it’s quite a big section on its own. Lets just get a brief idea on taxation on foreign equity holdings to start with. Basically there are two types of tax.

Capital gain tax: If your are not an US resident you don’t have to pay any capital gain tax in US. However you have to pay capital gain tax in India. The rate of the the tax depends on the period of holding.

LTCG ( Long term capital gain):

12.5% on profit, if the holding period is more than 24 months.

Example: Your initial investment was $100 and after holding it for 3 years, the value of your investment becomes $150. Now assuming you sold all your holdings, in that case your total profit should be $50. In this case you will have to pay 12.5% LTCG tax on $50, which is roughly $6.25.

STCG ( Short term capital gain):

If the holding period is less than 24 months then it will be taxed as per your income slab.

Example: Your initial Investment was $100 and the Holding period is 1 year. After that, total value value of your investment is $110. Now assuming you sold your holdings, in that case your total profit should be $10.

In this case $10 will be added to your income and taxed as per your income slab. If you fall under 30% tax slab, then you will have to pay 30% tax on $10.

Dividend : US deducts 25% TDS on dividends. You can claim credit in ITR (Double Tax Avoidance Treaty).

Note: There can be some Forex charges from 0.5% – 1.5% depending on the platform and amount.

What about safety

It’s completely safe if you use SEBI complaint, RBI approved channels and as long as you are avoiding unlicensed apps. Keep it simple and try to stick to platforms with US SEC – registered broker partners.

Pros :

  • Access to global tech stocks.
  • Portfolio diversification.
  • You can buy fractional shares.

Cons :

  • Currency risk ( USD – INR fluctuations).
  • Tax complexity.
  • Higher entry cost than Indian stocks.

Bonus Tip: You can also invest via Indian Mutual Funds in US Stocks.

If direct investing sounds overwhelming, try international mutual funds or ETFs available in India.

  • Note : some of these funds may or may not allow new investments depending on their AUM.

Final Words

Investing in US stocks is no longer just for NRIs or high net worth individuals. With the rise of fintech platforms and RBI’s LRS in place, any Indian with a PAN card can start investing in US stocks.

But always remember:

  • Understand the risks.
  • Diversify your investments.
  • Stay informed about taxation.
  • Knowledge is your best investment.

Disclaimer: This article is for educational purposes only. It does not constitute investment advice or recommendations. Please consult a registered financial advisor before making any investment decisions.

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