With some of the world's most valuable companies listed there, the US stock market presents attractive investment opportunities to Indians as well. Investing in the US stocks of top companies like Amazon, Apple, Meta (Facebook), Microsoft, Tesla, Google parent Alphabet and others offers chances of greater wealth creation
Indians can invest in US stocks in two ways from India – indirect and direct. Investing in direct equities, ETFs, and mutual funds are among the few popular options
Many domestic brokers work as intermediaries for your trades by collaborating with US stockbrokers. You can open an international trading account with any such broker
You can also set up a trading account with an international broker having a presence in India. Direct investment costs may be high because of brokerage and exchange rate charges
You can also trade US stocks through the NSE IFSC, a wholly-owned subsidiary of the National Stock Exchange (NSE). You will need a new demat account with an IFSCA-licensed broker to start investing
There are two kinds of mutual funds that make investments in US markets. One being fund of funds, which are local mutual funds that make investments in international mutual funds, and the other being local mutual funds which make investments in international stocks
Through international mutual fund programmes, there are prospects for overseas investments. Some of these mutual funds track various indices for different countries in Asia or South America; most funds track the US market indices S&P 500, Dow Jones and Nasdaq
There are two ways of investing through Exchange Traded Funds (ETFs). The first entails purchasing US ETFs via a domestic or foreign broker, and the second is the indirect route, where investors can purchase Indian ETFs of US indices
Portfolio Diversification: Investing in US stocks will help you diversify your portfolio, which helps weather market-linked fluctuations. By investing in US stocks from India, you broaden your investment exposure, which allows you to mitigate economic risks associated with the ups and downs in the Indian market
Investing in the US stock market from India gives you access to several blue-chip companies like Amazon, Apple, Tesla, Google parent Alphabet and others. The size, trade volume and investment options available in the US stock market present a unique investment opportunity which may boost portfolio returns
Profits from investments in the US stock market are covered under the Double Tax Avoidance Agreement, which states that the same income cannot be taxed twice. Dividend income from US stock investments is taxed at 25% for Indians and can be claimed as Foreign Tax Credit on domestic tax fillings
Capital gains are immune from taxation in the US, but investors are liable to pay taxes on the capital gains in India. If you hold the stocks for more than 2 years, it will qualify for long-term capital gains and be taxed at 20% with indexation
The content in the story is for information purposes only. Investors or market participants should consult their financial advisors before taking any position