GIFT City IFSC Framework Enables Indian Investors to Access US Stocks

Indian investors who want global stocks like Apple, Nvidia, Tesla, and Microsoft can use GIFT City. This route avoids opening an account with a foreign brokerage. Trading happens through an IFSC setup with clearer processes. Investors still need to follow Indian tax rules. Funding usually uses the Liberalised Remittance Scheme (LRS) in US dollars.

Access is available through the NSE International Exchange Global Access app or through IFSC broker units. Options include INDMoney, Zerodha IFSC, and HDFC Securities IFSC. After account setup, investors can buy and sell international stocks, ETFs, and mutual funds. Fractional investing is allowed, with value-based orders starting from $10.

Account opening requires KYC and tax declarations. Investors upload PAN and Aadhaar. FATCA/CRS self-certification and tax residency forms are also required. Investors digitally pre-fill the W-8BEN form. This US tax form supports treaty benefits on dividends. It can reduce default dividend withholding for eligible non-US investors.

To fund the account, investors remit US dollars through Indian net banking or a bank branch. The outward transfer is filed under LRS. The standard purpose code must be used as "Investment in overseas securities". The annual LRS limit is $250,000 per financial year. TCS at 20% applies when remittances exceed Rs 7 lakh.

After the bank remits money, the platform wallet shows the credited amount. US market trading hours are followed, which are 7:00 PM to 1:30 AM IST. Trading through GIFT City is exempt from domestic STT, GST, and stamp duty. This structure can lower India-side transaction costs for eligible trades.

GIFT City US stocks: how the IFSC framework works

GIFT City sits along the Sabarmati River in Gujarat. It is positioned as an international financial hub for cross-border business. GIFT City is divided into a Multi-Services Special Economic Zone for international activity. It also has a Domestic Tariff Area for domestic operations. The aim is to bring some overseas financial activity back.

Regulation is handled under one body in the IFSC. Instead of working separately with RBI, SEBI, and IRDAI, IFSC entities operate under the International Financial Services Centres Authority. This single-regulator approach can make compliance simpler for certain products. However, investors still need to complete bank and tax requirements for remittances.

GIFT City US stocks: tax rules for gains and dividends

The US does not charge capital gains tax on US stock sales by non-US residents. GIFT City also does not levy tax on gains from selling Unsponsored Depository Receipts. Indian investors must still pay tax in India based on holding period. The key rates are shown below for quick reference.

Item	Rule stated
Long-term gains	Held for over 2 years: 12.5% LTCG tax applies in India
Short-term gains	Held for 2 years or less: taxed as per the investor’s income tax slab
Dividend withholding on UDRs	US deducts 25%; HDFC IFSC charges 10% service fee on the remaining amount
Dividend example	A $10 dividend becomes $6.75 after deductions
India tax on dividends	Taxed as per slab; India-US DTAA may allow credit for US tax paid

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For investors using GIFT City to access US stocks, the main steps stay consistent. Investors choose an IFSC platform, complete KYC and tax forms, remit dollars under LRS, and then trade during US market hours. Taxes still apply in India for gains and dividends, while certain domestic transaction levies are not charged.