How To Buy US Stocks From India
There is a growth in the Indian economy by 8.7% right now, and it’ll be feasible to make sure that your wealth develops along with the economy by investing in it via the stock market.
In case you happen to be one of the 11 crore Indian residents investing in the stock market of India, then you have taken the initial step towards wealth creation for the long term.
However, it is important to consider diversification similar to all decent wealth management handbooks.
For example, you can go on developing a part of your wealth by investing in another market even though one market might not be performing particularly well in the short term.
Although the development of the US economy is not as fast as that of India, it is home to several of the biggest pharma and tech businesses on the planet.
The leading US stocks come with an extremely high market capitalization, and therefore, investing in the stock market of the US will guarantee you create more stable wealth.
This implies that it is comparatively safer to invest in the US stock market given that the total amount of invested money in all these stocks is to the tune of lots of dollars.
The US stock market presents a one-of-a-kind investment opportunity with companies such as Apple, Amazon, Meta (Facebook) as well as others.
In case you are thinking of how to buy US stocks from India, then we like to mention that there are 2 ways to get the job done – direct and indirect.
Table of Contents
1. Direct investment options
There are a couple of options in terms of direct investment methods:
a. Global trading account with domestic agent
Lots of domestic brokers collaborate with US stockbrokers to operate as mediators for your trades.
It’ll be possible to open a trading account internationally with one of these brokers.
However, lots of documents might be required to open this account.
You might face restrictions on the number of trades conducted by you or the types of investments you can make use of which will depend on the brokerage firm.
b. Overseas trading account with a foreign broker
One more option to set up a trading account for the global markets happens to be an international broker who has made his presence felt in India.
Before opening this account it is essential to be aware of the terms and prices.
Consequently, make it a point to do some research before choosing the most effective broker to buy US stocks from India.
Ensure that you are aware of all the expenses prior to opening an account.
This is because of the fact that the costs of direct investment can be high due to brokerage as well as exchange rate charges.
2. Indirect Investments
It is feasible to take an indirect position in US stocks similar to domestic investments, without investing directly in them.
Here you need to consider a couple of options:
a. Mutual Funds
You will come across lots of Mutual Funds investing in Mutual Funds and/or US Stocks these days.
There is no need to maintain a minimum deposit or open an overseas trading account that can be the case with certain stockbrokers providing direct global investments.
b. ETFs (Exchange-Traded Funds)
Investing in ETFs will also help you to gain exposure to US stocks.
You will come across both direct as well as indirect routes obtainable for ETFs.
It is feasible to buy an Indian ETF of global indices or even buy US ETFs directly through an international or domestic broker.
c. Investing by means of New-Age Apps
Several apps have been introduced by start-ups to allow Indian investors to make investments in the US stock market since the development of mobile apps for various types of services.
Several of these apps might not allow Intraday trading in the US market from this country because of regulatory obligations.
How much can be invested in US stocks?
Guidelines released by the Reserve Bank of India under the LRS (Liberalized Revenue Scheme) allowed an Indian Resident to invest around 1.9 crore rupees (250000 dollars) every year sans any special permissions.