Got FOMO About US Stocks? How to Invest in US Stock Market from India - Step-by-Step Beginner's Guide

Apple, Nvidia, Microsoft, Google, Amazon - the largest listed companies in the US stock market have given unimaginable returns in the long run but sitting in India, people often wonder if it is even possible to invest in Dow or S&P 500 companies, and if yes, is the process complicated or simple?

The answer is yes and no. If you are a regular investor, you know that the United States is undoubtedly the largest stock market in the world, and stocks listed in its indices are, more often than not, lucrative and are listed on the New York Stock Exchange (NYSE) and Nasdaq.

The Dow Jones Industrial Average (30 blue-chip companies) and S&P 500 are the indices where the main trading happens, and the stock market is strictly regulated by the Securities and Exchange Commission (SEC) - which is similar to the SEBI in India.

Step-By-Step Guide on How to Invest in US Stocks

1. There are two ways to start - invest directly through traditional brokers or through GIFT City (Gujarat International Finance Tec-City).

2. Through brokers, Indian and/or International, remittances are made in US dollars and you can invest in stocks, bonds, derivatives, alternatives, ETFs etc.
3. Direct routes are preferred by institutional investors who could go through US stock brokers like Fidelity, Charles Schwab, and Robinhood, or if they prefer Indian platforms, there are several like Vested Finance, INDmoney etc.

4. Investors who choose to buy through the GIFT City - can purchase international securities, including US companies' stocks, through the International Financial Services Centre (IFSC) framework known as Global Access Provider (GAP).

5. Through GIFT city, one can completely avoid setting up a foreign brokerage account, and it falls under the Indian regulatory umbrella.
6. As long as you have your PAN and Aadhaar card and KYC can be done through Digilocker, you can add money to your GIFT City wallet available on INDMoney and hopefully soon coming to Groww, Zerodha etc and buy stocks.

7. You can effortlessly buy stocks during US market trading hours which are 9:30 AM to 4:00 PM Eastern Time (ET). In Indian Standard Time (IST), this translates to 7:00 PM to 1:30 AM during Daylight Saving Time (mid-March to early November) and 8:00 PM to 2:30 AM during Standard Time (early November to mid-March).

Capital Gains Tax - How Does It Work?

Capital gains tax is the tax imposed on the profit one can earn when one sells an asset, like real estate, stocks, or gold, for more than one paid for it. There are two types of capital gains - short-term capital gain (STCG) and long-term capital gain (LTCG).

In India, for stocks and mutual funds-

STCG (Hold period ≤ 12 months): Taxed at a flat rate of 15%.LTCG (Hold period > 12 months): Taxed at 12.5%.

The first ₹1.25 lakh of LTCG in a financial year is completely exempt from tax.

No Double Taxation: Through the Double Taxation Avoidance Agreement (DTAA) between India and the US, capital gains are generally only taxed in India.

Investing in the world's biggest companies is no longer limited to Wall Street investors. For Indian investors, US stocks have opened a window to global wealth creation, but understanding regulations, taxes, and risks remains the first step before taking the leap.