4 ways to invest in US stocks if you are in India

You can invest in US stocks in multiple ways: You can either directly invest via US stock brokers or invest through international financial centers in Gujarat’s GIFT City in Ahmedabad, which is India’s first International Financial Services Centre (IFSC).

If you prefer indirect investment methods, then you can opt to invest through Indian brokers who have foreign tie-ups or invest in US-based ETFs.

You could have a gazillion reasons to invest in the US Stock market: 

• Maybe you want your hands on the shares of Warren Buffet's Berkshire Hathaway or Apple, or maybe even those of Amazon.
• Or maybe you are thinking of investing in the US to maintain the value of your money, especially since the rupee is falling like never before. (If you invest there and then stock prices rise and the rupee falls, that could make you a hell lot of money!) 
• You could also be afraid that some political events in your city might affect your stock prices to fall. So investing in other regions will ensure that at least one strong local issue will not hit your international portfolio.

No matter what your reason is, here is how you can invest in US stocks:

Just like we have NSE and BSE in India, in the US, you can invest in two stock exchanges called NASDAQ and the NYSE. The NASDAQ has major companies like Amazon, Facebook, and Microsoft whereas the NYSE (or the New York Stock Exchange) lists companies like Berkshire Hathaway, JP Morgan Chase, Coca-Cola, etc.

Now, to invest in these stocks, there are multiple ways: 

1. Invest directly
2. Invest indirectly

1. Invest directly via US stock brokers  

• Just like you open demat accounts in Indian banks to trade in stocks on the NSE, you can open a foreign trading demat account with an international broker to buy US stocks. Once your trading account is opened, you can select your shares and send money to the brokers directly through the Indian banks. Unlike Indian traders like Zerodha, who help you trade your shares but won't buy them for you, US brokers will buy the shares for you. For eg: Drive Wealth is a US brokerage company that will buy US shares for you. To buy these shares, you can use the services provided by 'IND Money', to transfer your money to drive wealth. Once your shares are purchased, they will show on the IND Money app. 

  

   

• This type of investment is covered under and restricted by the central government through RBI regulations. RBI regulations allow you to spend a maximum of $250,000 (ie around Rs 1.97 crore) through Liberalized Remittance Scheme on all foreign expenditures and that includes buying stocks, education, travel etc. 

2. Invest directly through GIFT City 

The government has created a special business, finance, and tech hub in Gujarat called GIFT City, which houses India's International Financial Services Centres (IFSC). The GIFT City houses many international stock exchanges that trade in currencies other than the Indian Rupee. NSE and BSE both own international stock exchanges called NSE IFSC and INDIA INX respectively which deal in foreign currencies. 

The NSE IFSC has currently listed 25 popular US companies and is expected to list up to 50 companies in the coming years. So if you want to buy shares of these 25 companies, you can get them through NSE IFSC. The 25 companies include Alphabet (Google), Amazon, Tesla, Microsoft, Netflix, Walmart, Facebook, Apple etc. 

3. Invest indirectly through Indian brokers who have foreign tie-ups  

Just like Indian mutual fund houses (like Nippon India, ICICI Prudential, and SBI Mutual Fund) find the best Indian stocks and invest in them, foreign mutual funds do the same thing for foreign stocks. Indian mutual fund houses also have foreign tie-ups which enable them to invest in foreign markets. You can invest in these Indian mutual funds, which will in turn invest your money with mutual funds in the US. These US mutual funds will invest in US stocks and all your returns will come through them.

4. Invest in US-based Exchange Traded Funds (ETFs) 

Index funds are basically where the money is invested in stocks of indexes like Sensex (which is a basket of 30 biggest companies), Nifty 50 (which is a basket of 50 biggest companies), or sector funds like Bank Nifty. The US too has similar indexes called ETFs and a peculiar feature of ETFs is that you can buy or sell these ETFs just like stocks. So you can buy these ETFs that directly hold US stocks like S&P Vanguard 500, and SPY SPDR ETF which are based on Indexes of S&P, Nasdaq and Dow Jones.