How to Invest in US Stocks from India Teji Mandi

 

If you have invested in the Indian stock market, you have already taken the first step towards your wealth-creation journey. And as with finance experts, diversification must be taken into account. For instance, investing in a different market lets you keep adding to your wealth even if one market isn’t performing very well right now. Although the US economy may not be expanding as quickly as India’s, not to forget, it is still home to some of the biggest pharmaceutical and technology firms in the world.

In this article, let’s look at ways to invest in the US stock market, charges, pros and cons, and more!

Ways to Invest in the US Stock Market from India

Investing in the US stock market from India is simple. There are two-three approaches one may take for this. The foremost and most straightforward approach is to open a Demat and trading account with an Indian broker offering this facility to invest in international stock markets. Once your account has been created and running, you may start buying and selling stocks listed on the NYSE and NASDAQ exchanges.

Following are the ways to invest in the US stock market:

Direct Investment

Opening an overseas trading account with a domestic broker:

 To invest in the US stock market from India, you only need to open an overseas trading account with a domestic brokerage company that collaborates with US brokers. Your domestic broker will serve as a middleman, facilitating and carrying out your transactions.

Opening an overseas trading account with a foreign broker:

This makes it possible for you to access the US stock market without any middleman. All you need to do is choose overseas brokers with a presence in India.

Indirect Investment

Mutual Funds:

Opting for this method helps to avoid the fees associated with a foreign trading account. This method also allows investors to diversify their portfolios among asset classes and market sectors.

Exchange Traded Funds (ETFs):

Investing in Exchange Traded Funds, also commonly known as ETFs, can be done in two ways. The first involves buying US ETFs through a domestic or international broker. The second is an indirect approach where you can buy ETFs of American indices.

Investing via new-age apps:

There are numerous apps that allow you to invest in the US stock market. These apps partner with regulated US firms and transact on your behalf. Some advantages include access to multinational companies, portfolio diversification, and exposure to new opportunities, to name a few.

How Much Can We Invest in US Stock?

Under the Liberalized Revenue Scheme (LRS), the RBI permits Indian investors to invest up to $2,50,000 (approximately Rs 1.9 crores) each year in the US stock market. This can be done without obtaining any special permission from the governing body.

If you are choosing to invest in the US, a crucial thing, which may seem very basic but is exceptionally vital, is that when investing in direct US stocks from India, you must consider the time difference between the two countries. The US stock market is open from 9:30 am to 4 pm EST, and 7 pm to 1:30 am IST. This means that you will need to be available during those hours to trade. Read more about investing in us stocks from India