Invest in US Stocks From India For savvy Indian investors, trading US stocks is becoming an increasingly popular option. With the global markets ever more connected, it's now easier than ever to take advantage of opportunities in other countries. While there are undoubtedly risks involved in trading stocks from a foreign market, there are also …
Invest in US Stocks From India
For savvy Indian investors, trading US stocks is becoming an increasingly popular option. With the global markets ever more connected, it’s now easier than ever to take advantage of opportunities in other countries. While there are undoubtedly risks involved in trading stocks from a foreign market, there are also significant potential rewards.
By gaining a deeper understanding of the forces at play in the US stock market, you may be able to make smarter and more profitable investment decisions. So if you’re looking for new opportunities to grow your portfolio, trading US stocks from India might be just the thing for you!
If you wish to diversify your investment portfolio across other geographies, the stock market in the United States may be a good place to start. And, if you’re wondering how to invest in the stock market of the United States from India, you’ll be relieved to know that the process is simple and straightforward. Equities in the United States can be purchased or traded in for cash. Examples of such stocks include Apple, Google, Tesla, and Microsoft.
First and foremost, just as an investor planning to engage in Indian markets should get in touch with a brokerage firm, an investor intending to invest in the US stock market should get in touch with a brokerage firm specializing in foreign investments.
If someone wishes to invest in the United States stock market, they must comply with the land laws. As a result, an investor must ensure that their investments are by the rules and regulations established by the Reserve Bank of India before deciding.
Popular online brokers such as GoDoFx, Motilal Oswal, Geojit, HDFC Securities, and fintech platforms, among others, provide comprehensive investment services in the United States.
How can an Indian Invest in US Stocks?
Purchasing shares of Amazon, Google, or Apple is more straightforward and practically identical to purchasing shares of Indian corporations on the Indian stock exchange. However, what sets it apart is that the purchase is made through an international brokerage business, and as an investor, you must follow the RBI’s foreign exchange laws. The foreign brokerage firm handles the complete documentation aspect to ensure that the investor focuses on buying US equities with a click of a mouse.
Using the purpose code S0001, investors can invest in US stocks under the RBI’s Liberalized Remittance Scheme (LRS). Foreign securities investing has attracted investors from all over India. This provides a number of benefits, one of which is the high rate of return.
Which is Better, Indian or American Stock?
In the long run, US markets have been less volatile than Indian ones. Over the years, Indian equities have been more volatile, with more significant swings in returns. Furthermore, investors who seek to diversify by investing in US markets should expect their portfolios to move in a different direction than Indian indexes.
If you diversify your portfolio regionally, your portfolio will be more stable. Those in established countries are less volatile over the long run than markets in emerging markets. By investing in the stock market of the United States, you can become a part of the global economic growth story.
Can I Purchase Tesla Stock in India?
To purchase Tesla stock from India, you must first open an international brokerage account and trade in US equities and ETFs. At an exchange rate of Rs 73 to a dollar, the price of a Tesla share in Indian rupees is almost Rs 51,000. However, if you believe the price is too excessive, you can also purchase a fraction of the share.
GoDoFx: The Best Trading Platform to Buy US Stocks
GoDoFx provides you access to all of the significant stock CFDs from all of the major markets in the United States. In the CFD stock list, you’ll find some of the most profitable companies in the world, like Google, Coca-Cola, Facebook, McDonald’s, Apple, and Microsoft, among others.
Step by Step Guide to Trade US Stocks from India
Step 1: Account Opening
The first thing to do for buying US equities is to register online, and it’s a quick and straightforward process after that. You can connect with GoDoFX customer support, who will help you through the process.
Step 2: Documentation
You will need to confirm your identity and address. The documentation is minimal and includes evidence of ID (with photo) and address. Voter ID, PAN card, valid driving license, passport, or voter registration card with photo are all needed. Address proof can be a utility bill, phone bill, bank, or credit card statement. Or a valid driving license with address or a government-issued photo ID with address, like an Aadhaar card or passport.
Step 3: Adding Funds
After your account has been approved, you will be able to make deposits into your brokerage account to fund it.
That’s you are done!
Note: Before you begin to add funds and make international investments, you must ensure that you are familiar with the RBI’s foreign exchange restrictions, which is what the Liberalised Remittance Scheme (LRS) is all about.
It is necessary for you, as an Indian resident, to purchase dollars (or any other currency) using Indian rupees (INR) from an authorized dealer (the bank) in India to travel abroad. The dollars can then be spent or remitted abroad to acquire real estate or other assets such as equity stakes in companies.
Entering other Markets through US Trading
Investing in the United States might be a convenient method to gain exposure to other international markets. You may invest in the Chinese economy by investing in the US market, for example. The fast-growing Chinese economy, fueled by a growing middle class and rapid technological adoption, has spawned some of the world’s most successful technology firms. However, instead of going public in China, a growing number of Chinese technology businesses are opting to list in the United States. Furthermore, ADRs (American Depository Shares) of Chinese corporations exist, which allow for USD-based purchasing and selling of the underlying shares, which multinational banks or brokers hold.
How will these Investments affect my Tax Situation?
There are two sorts of tax events that occur when you invest in the US stock market:
Taxes on Investment Gains: This gain will be taxed in India, and in the United States, no taxes will be withheld. The amount of taxes you must pay in India is determined by the length of time during which you retain the investment. The long-term capital gain threshold is 24 months, with an indexation advantage at a rate of 20%. Capital gains are deemed short-term if you sell a stock in less than 24 months and are taxed according to your income tax bracket.
Dividend Taxes: Unlike investment profits, dividends will be taxed at a fixed rate of 25% in the United States. Fortunately, the United States and India have a Double Taxation Avoidance Agreement (DTAA) that permits taxpayers to deduct income tax paid in the United States. The 25% tax you already paid in the United States is available as a Foreign Tax Credit, which you can use to offset the income tax you owe in India. Please see this page for further information on how taxes might work.
Conclusion
Allowing yourself to contemplate investing in international markets can provide your portfolio with an additional layer of diversification. Researching and analyzing stocks has never been easier with so much information at our fingertips. However, it’s crucial to keep in mind certain advantages and disadvantages of investing in international stocks. As a result, make sure to analyze all factors and support following your financial objectives and risk tolerance.
Happy Investing!
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