How to Buy US Stocks from India: Steps and Tax Guide
If you want exposure to global technology giants like Apple and Microsoft, you can now invest in foreign markets directly from India. By spreading your capital across geographies, you may reduce your dependence on the Indian market and gain exposure to some of the world’s largest companies.
Quick Takeaways
- Direct global access: As an Indian resident, you can legally buy full or fractional shares of listed US companies through approved remittance channels.
- Strict annual limits: The Reserve Bank of India (RBI) caps your overseas remittances at $250,000 per financial year under the Liberalised Remittance Scheme (LRS).
- Mandatory tax compliance: Investing abroad introduces distinct tax obligations, including tax collection at source and mandatory global asset reporting during annual filings.
What Is US Stock Investing and How Does It Work for You?
Investing in US stocks from India lets you buy equity shares, exchange-traded funds (ETFs), or depository receipts listed on major American exchanges like the NASDAQ and the New York Stock Exchange (NYSE).
This process is legally governed by the Reserve Bank of India (RBI) under the Liberalised Remittance Scheme (LRS). Under LRS, the RBI lets you, as a resident individual, remit up to $250,000 per financial year (April to March) for permissible current and capital account transactions, including stock market investments.
One major advantage the US equity market offers you is fractional share trading. Unlike the Indian stock market—where you must buy at least one full share—US brokerages allow you to purchase fractions of a share based on a fixed dollar amount. This means you can invest as little as $10 or $50 into high-priced stocks without needing thousands of dollars upfront.
Tip: You do not need large sums of capital to start building a global portfolio; fractional shares allow you to own a piece of top US companies with small periodic amounts.
4 Primary Routes to Buy US Stocks from India
You can choose from four primary pathways to gain exposure to US equities, depending on whether you prefer direct control over individual stocks or indirect exposure through local funds.
Direct International Brokerage Apps
Specialized platforms such as Vested and INDmoney, along with global brokerages like Interactive Brokers, partner with US-registered broker-dealers. Several large Indian brokers, including Zerodha and Groww, received approval in 2026 to offer US stock investing through GIFT City, so check whether the feature is live on your app before you plan around it. You open a foreign trading account, transfer funds via your Indian bank under LRS, and buy individual US equities or ETFs directly.
GIFT City NSE-IX Route
NSE International Exchange (NSE-IX) located in GIFT City (Gujarat) offers Unsponsored Depository Receipts (UDRs) on select top US stocks. This pathway lets you trade underlying US securities through authorized Indian trading members without transferring money directly to a foreign brokerage.
Domestic International Mutual Funds
Indian Asset Management Companies (AMCs) offer Fund of Funds (FoFs) that invest their corpus into underlying foreign mutual funds or global ETFs. You can invest in INR using standard Systematic Investment Plans (SIPs) or lump-sum payments without managing foreign bank transfers yourself.
US Equity ETFs Listed in India
Certain exchange-traded funds listed on the NSE and BSE track major US benchmarks like the S&P 500 or NASDAQ 100. These can be traded directly through your existing Indian demat and trading account.
| Investment Route | Minimum Investment | Asset Access Type | Funding Convenience | LRS Transfer Required |
|---|---|---|---|---|
| Direct International Apps | Very Low ($1–$10) | Individual Stocks & ETFs | Moderate (Outward Remittance) | Yes |
| GIFT City NSE-IX | Low (Fractional Receipts) | Selected US Depository Receipts | Moderate (USD Remittance to a GIFT City Account) | Yes (via LRS framework) |
| International Mutual Funds | Low (₹100–₹500 SIP) | Overseas Fund/ETF Units | Very High (Standard INR Netbanking) | No (Handled by AMC) |
| Domestic US ETFs | Low (1 Unit price) | Indian-listed Index Units | Very High (Standard Indian Broker) | No (Traded on NSE/BSE) |
Warning: Direct international transfers incur bank transfer fees and foreign exchange margin conversion charges, which can reduce your overall net returns if you remit very small amounts frequently.
Your returns depend on both the stock price and the USD/INR exchange rate. A stronger rupee can reduce your gains when you convert back to INR, and US stocks can fall sharply in value just like Indian stocks, so you may lose part of your capital.
Tax Rules for Investing in US Stocks from India
Cross-border investments are subject to specific tax mandates overseen by the Income Tax Department and international tax agreements. The rates below apply for FY 2026-27.
- Tax Collected at Source (TCS) under LRS: When remitting funds abroad under LRS, a 20% TCS applies on outward remittances exceeding ₹10 lakh in a financial year. You do not pay TCS as an extra tax—you treat it as an advance tax credit that you adjust or claim back when filing your Income Tax Return (ITR).
- US Dividend Withholding Tax: US companies withhold tax at source on dividends. Under the US-India Double Tax Avoidance Agreement (DTAA), the US withholds 25% tax on your dividends, but only if you have submitted Form W-8BEN to your broker. Without it, the withholding rate rises to 30%. You can then claim a Foreign Tax Credit (FTC) in India by filing Form 44 (earlier Form 67) before your ITR due date.
- Capital Gains Tax in India: The US does not tax capital gains for non-residents, but India taxes them fully:
- Short-Term Capital Gains (STCG): Applies if shares are held for 24 months or less. Gains are added to your total income and taxed at your applicable income tax slab rate.
- Long-Term Capital Gains (LTCG): Applies if shares are held for more than 24 months. Gains are taxed at 12.5% without indexation benefits.
- Mandatory ITR Schedule FA Declaration: Holding foreign stocks or maintaining an active international trading account makes it legally mandatory to declare all foreign assets in Schedule FA (Foreign Assets) when filing your annual ITR. Omitting foreign stock holdings in Schedule FA can attract severe penalties under the Black Money (Undisclosed Foreign Income and Assets) Act.
- US Estate Tax Exposure: If you are not a US citizen or resident, US-listed shares above $60,000 in total value can attract US estate tax of up to 40% for your heirs. India and the US do not have an estate tax treaty, so review this risk as your portfolio grows.
Steps to Open an Account and Buy US Stocks
If you decide to proceed with direct US stock investing through an international app, follow these sequential steps:
- Select a Registered Platform: Choose an app or broker partner that offers transparent fee structures, seamless bank integration, and proper US regulatory coverage, such as registration with the Securities and Exchange Commission (SEC) and protection from the Securities Investor Protection Corporation (SIPC).
- Complete Digital KYC: Upload required compliance documents, including your PAN card, Aadhaar card, proof of address, and active Indian bank account details.
- Initiate Outward Remittance (LRS): Log in to your Indian bank’s netbanking portal, navigate to outward remittances, fill out Form A2 under the RBI LRS framework, and transfer funds (INR converted to USD) to your designated foreign broker account.
- Place Your Trade Order: Once the USD balance reflects in your foreign brokerage wallet, search for your desired US ticker symbol and place a market or limit order for full or fractional shares.
Conclusion
Mastering how to buy US stocks from India opens up valuable global diversification opportunities for you beyond domestic markets. Whether you choose direct international brokerage apps, GIFT City receipts, or local US-focused mutual funds and ETFs, staying within RBI’s LRS limits and meeting your tax obligations helps you avoid compliance trouble. With fractional shares and a clear view of the tax rules, you can start building an international portfolio at a pace that suits your risk appetite.
Understanding market fundamentals is the key to building a resilient, well-diversified global portfolio.
FAQs
You can buy directly by opening an account with an international broker and remitting funds under RBI’s LRS, or indirectly through Indian mutual funds and ETFs that track US indices.
Zerodha has received approval to offer US stock investing through GIFT City, but check the Kite app for current availability. Until the feature is live on your account, you can get indirect exposure through Indian-listed international ETFs and international mutual funds.
There is no single best app for everyone. Compare platforms on total cost (account fees, FX markup, and transfer charges), US regulatory coverage such as SEC registration and SIPC protection, ease of LRS transfers, and whether you want individual stocks or only ETFs.
As of FY 2026-27, US dividends face 25% withholding tax if you have submitted Form W-8BEN, while your capital gains are taxed in India at your slab rate (held 24 months or less) or 12.5% (held more than 24 months). If your LRS transfers cross ₹10 lakh in a financial year, 20% TCS applies to the amount above that limit.
Under RBI’s Liberalised Remittance Scheme (LRS), you can remit up to $250,000 per financial year for permissible investments, including US stocks and ETFs.
You can invest in foreign stocks by transferring funds to a foreign brokerage, buying GIFT City NSE-IX depository receipts, or investing in domestic international mutual funds and ETFs.
Disclaimer: This article was written with the help of AI and reviewed by the Monetyra editorial team. It is for educational purposes only and should not be considered financial advice. Trading and investing in financial instruments involve significant risk of loss and are not suitable for all investors, and past performance of any strategy does not guarantee future results. Please consult a licensed financial advisor before making any investment or trading decision.
In India, foreign exchange transactions and overseas investments are regulated by the RBI and SEBI. Readers are advised to verify the regulatory status of their broker/fund house and ensure compliance with applicable Indian laws before investing.