How to Invest in US Stocks From India

With the rising popularity of global investing, many Indian investors are now looking beyond domestic markets to explore opportunities in the US stock market. The good news? It’s completely legal and increasingly accessible. Whether you want to invest in Apple, Tesla, Google, or ETFs, here’s everything you need to know about how to buy US stocks from India - including platforms, costs, taxes, legal rules, and FAQs.

How to Invest in US Stocks From India?

There are two primary ways for Indians to invest in US stocks:

1. Direct Investment via International Brokers

Indian residents can use international investment platforms that allow access to the US stock market. You’ll need to complete KYC, fund your USD account via LRS (Liberalised Remittance Scheme), and start investing.

2. Indirect Investment via Mutual Funds or ETFs

Several Indian mutual fund houses offer US-focused funds or ETFs. These are ideal for those who want professional fund management without opening a foreign account.

Both options are completely legal under Indian laws, and suitable for different risk appetites and investor experience levels.

Charges Involved While Investing in US Stocks

When investing in US stocks from India, keep these charges in mind:

• Account Opening or Platform Fees: Some platforms may charge a nominal one-time or annual maintenance fee.

• Currency Conversion Charges: INR to USD conversion involves a markup by the bank, typically 1–2%.

• Transaction Fees: Includes brokerage, platform fees, and U.S. SEC fees.

• Withdrawal Fees: Fees may apply when transferring money back to your Indian bank account.

Compare platforms to ensure you're getting the best deal based on your investment amount and frequency.

Taxes on US Stock Investments

Understanding taxation is key to smart investing. Here's how US stock investment from India is taxed post-Union Budget 2025:

In the United States:

• Dividends: Taxed at 25% for Indian residents. This is deducted at source in the US.

• Capital Gains: No capital gains tax is levied in the US for Indian investors.

Taxes on US Stocks in India (As per Union Budget 2025 updates):

• Short-Term Capital Gains (STCG): For US stocks held for less than 24 months, STCG is now taxed at your income tax slab rates.

• Long-Term Capital Gains (LTCG): For holdings over 24 months, LTCG is now taxed at 20%, with indexation benefit.

You’ll need to declare these earnings when filing income tax returns in India under the “foreign income” section.

Here’s an example that will help you understand the tax rules better.

Taxation on US Stocks for an Indian Resident

Rohan, an Indian resident, buys 10 shares of Apple Inc. at $100 each on January 1, 2022, investing $1,000. He receives $50 in dividends during 2024 and later sells all shares at $150 each on Feb 1, 2025, for $1,500.

Dividend Tax (US):

• Dividend received: $50

• Tax deducted at source in the US: 25% or $12.50

• Net dividend received: $37.50

• Eligible for foreign tax credit in India under DTAA

Capital Gains Tax (India):

Case 1: Long-Term Holding (More than 24 months)

• Holding Period: 37 months → LTCG

• Indexed cost (assumed): $1,100

• Capital Gain: $400

• Tax @20% with indexation: $80

Case 2: Short-Term Holding (Less than 24 months)
If Rohan had sold the shares on Jan 15, 2024 (held for ~12.5 months) at $130/share:

• Sale value: $1,300

• STCG: $300

• Taxed as per the income slab. If in a 30% slab, tax = $90

Tax Implications on US Stocks for Indian Investors

Important Rules: FEMA and LRS

If you're wondering if Indians can invest in US stocks, the answer is yes—but under some RBI rules:

• FEMA (Foreign Exchange Management Act): Governs all foreign exchange transactions. Investing in US stocks falls under permissible current account transactions.

• LRS (Liberalised Remittance Scheme): Allows Indian residents to remit up to USD 250,000 per financial year for foreign investments, education, travel, and more.

So, how much can I invest in US stocks? Up to $250,000 per year under LRS - plenty for most retail investors.

Steps to Invest in US Stocks From India

Here’s a simple guide on how to invest in US stocks from India:

1. Choose a Platform
   Pick an international broker or an Indian platform offering US stock access.

2. Register and Complete KYC
   Submit your PAN, ID proof, and bank account details.

3. Fund Your USD Account
   Use your bank to transfer funds via the LRS. Fill Form A2 and the LRS declaration.

4. Start Buying US Stocks
   You can buy full shares or even fractional shares in companies like Apple, Amazon, etc.

5. Monitor and Withdraw
   Track your portfolio and withdraw funds when needed (charges may apply).

Reasons to Invest in US Stocks From India

Here’s why it’s a smart move to consider US stock investments:

• Global Diversification: Reduce risk by spreading your portfolio across geographies.

• Exposure to Big Tech: Own part of global leaders like Microsoft, Nvidia, or Meta.

• Strong Economic Performance: The US market historically offers consistent long-term growth.

• Hedge Against INR: If the Indian rupee depreciates, your USD-denominated investment may gain in INR terms.

Things to Remember Before Investing in US Stocks From India

• Understand Time Zones: US markets run during IST night hours (7 PM – 1:30 AM).

• Currency Fluctuation Risk: Returns may be impacted by INR/USD movement.

• Track LRS Limit: Stay within the $250,000 annual limit.

• No Margin Trading: RBI regulations don’t allow margin funding in foreign markets.

• Tax Filing Compliance: Declare foreign assets in ITR under Schedule FA.

Conclusion

So, can an Indian buy US stocks? Yes - easily and legally. With multiple platforms and simplified processes, investing in US stocks is now just a few clicks away. Whether you go direct or use mutual funds/ETFs, it’s a great way to diversify and grow your wealth. Just be mindful of charges, tax rules, and your financial goals.