You wake up to an alarm on your iPhone, check your emails on Gmail, scroll through Instagram, and maybe binge a series on Netflix before bed. You are already a consumer of the American economy every single day.
But have you ever thought about being an owner?
For a long time, buying US stocks felt like an exclusive club for the ultra-wealthy. You needed complicated bank approvals, expensive brokers, and a lot of patience.
That has changed. Today, a college student in Mumbai or a software engineer in Bangalore can own a piece of Google or Amazon with just a few taps on their phone.
If you have been wondering how to invest in the American stock market from India, this guide is for you. No jargon, no fluff—just the practical steps to get you started.
Why Should Indian Investors Look West?
Before we get into the “how,” let’s talk about the “why.” Why bother moving money across borders when the Sensex and Nifty are doing just fine?
1. Global Diversification The Indian market is fantastic, but it’s heavy on banking and finance. The US market gives you access to global tech giants, pharmaceutical innovators, and AI pioneers that simply don’t exist here.
2. The Dollar Advantage This is the silent compounding factor. Historically, the Indian Rupee has depreciated against the US Dollar. By investing in US stocks, you aren’t just betting on the stock going up; you are also hedging against the rupee losing value. If the dollar gets stronger, your portfolio value in INR goes up automatically.
3 Ways to Buy US Stocks from India
You generally have three main routes to take. The right one depends on how much control (and paperwork) you want.
1. Direct Investment via Apps (The Easiest Way)
This is what most retail investors use today. Fintech apps like INDmoney, Vested, or Groww have revolutionized the process.
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Pros: User-friendly, often zero commission on trades, and they handle the confusing paperwork for you.
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Cons: You still have to pay foreign exchange (forex) fees when transferring money.
2. International Brokerage Accounts
If you are a serious trader or have a larger capital, you might prefer established brokers like Interactive Brokers, Charles Schwab, or opening an overseas account through Indian brokers like ICICI Direct or HDFC Securities.
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Pros: Advanced tools, better trade execution, and access to more complex instruments (like options).
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Cons: The interface can be overwhelming for beginners, and minimum deposit requirements are often higher.
3. Mutual Funds & ETFs (The “Set It and Forget It” Route)
If you don’t want to pick individual stocks, you can buy Indian Mutual Funds that invest in US markets (like the Motilal Oswal Nasdaq 100).
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Pros: No need to open a US brokerage account. You buy and sell in Rupees just like any other SIP.
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Cons: You rely on the fund manager, and expense ratios can eat into returns. Note: As of late 2024/2025, check for restrictions on new lump-sum investments in these funds due to RBI limits.
The Legal Stuff: LRS and Limits
This is the part most people skip, but you shouldn’t.
The Reserve Bank of India (RBI) allows you to invest abroad under the Liberalised Remittance Scheme (LRS).
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The Limit: You can remit up to $250,000 (approx. ₹2 Crores) per financial year. For most of us, that is more than enough.
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The TCS Trap: Be aware of Tax Collected at Source (TCS). As of recent rules, if you remit more than ₹7 Lakh in a year, a 20% TCS applies. You can claim this back when you file your income tax returns, but it blocks your cash flow upfront.
Step-by-Step: How to Buy Your First US Stock
Ready to start? Here is the actual workflow using a typical investment app.
Step 1: KYC and Account Setup Download your chosen app. You will need your PAN card and Aadhaar for KYC. Since this involves foreign investment, the verification might take 1–2 days.
Step 2: Add Funds (The Remittance) This is different from adding money to your Zerodha or Upstox account. You aren’t just transferring money; you are technically “remitting” dollars.
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You will transfer INR from your bank to the broker’s partner bank in the US.
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Pro Tip: Your bank will charge a forex markup fee (usually 0.5% to 2%). Shop around or ask your bank for a better rate if you are transferring a large amount.
Step 3: Buy the Stock Once the dollars hit your account (usually takes 24–48 hours), you can buy stocks. The best part? You can buy fractional shares. Can’t afford a full share of Amazon? Buy $10 worth.
Taxes: The Elephant in the Room
Do not ignore the tax man. Taxation on US stocks is slightly different from Indian stocks.
1. Capital Gains
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Held for less than 24 months: This is Short Term Capital Gain (STCG). It is added to your income and taxed according to your slab.
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Held for more than 24 months: This is Long Term Capital Gain (LTCG). Generally taxed at 12.5% (post-July 2024 budget changes) without indexation benefits.
2. Dividends
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The US government charges a flat 25% tax on dividends for Indians (thanks to the tax treaty).
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This dividend is also added to your income in India and taxed.
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Good News: You can claim the 25% tax paid in the US as a Foreign Tax Credit (FTC) in India so you don’t get taxed twice on the same amount.
FAQs: Common Questions from Indian Investors
Q: Do I need a US bank account to invest? No, you do not. The investment apps create a virtual US brokerage account for you. You transfer funds directly from your Indian bank account.
Q: Can I do intraday trading in US markets from India? Technically, yes, but it is not recommended. The settlement cycles and high transaction costs (forex fees) make day trading very difficult to sustain profitably. This route is best for long-term investing.
Q: What happens if the investment app shuts down? Your stocks are held with a US custodian (like DriveWealth), not the app itself. Even if the Indian app goes bust, your shares are safe with the US custodian and can be claimed or transferred.
Final Thoughts
Investing in the US market isn’t about abandoning India; it’s about building a fortress around your wealth. It gives you exposure to the world’s biggest innovation engine and protects you from local volatility.
Start small. Buy a fractional share of a company you understand and use every day. Watch how it moves. The best way to learn how to invest in American stock market is simply to begin.
(Disclaimer: I am a content writer, not a SEBI-registered financial advisor. This article is for informational purposes only. Please consult a financial advisor before making investment decisions.)
