Indian investors are increasingly eyeing US markets as a way to diversify beyond domestic equities. With giants such as Apple, Microsoft and Tesla shaping global innovation—and with the US market accounting for a dominant share of global market capitalisation—investing overseas is no longer viewed as exclusive or complicated. What once seemed accessible only to the ultra-wealthy is now open to everyday investors looking for long-term global exposure.
Under the RBI’s Liberalised Remittance Scheme, Indian residents may invest up to $2,50,000 per financial year in foreign assets, including US equities. The process requires a self-declaration, Form A2 and the correct purpose code, usually S0001.
Dividends from US companies attract a 25% withholding tax—claimable later under the India–US treaty—while capital gains are taxed only in India. Short-term gains follow slab rates and long-term gains are taxed at 20% with indexation.
Several Indian brokerages now offer direct access to US markets. Transactions happen in rupees and onboarding tends to be simple, making them a common first choice for new investors.
Others open accounts with American brokerages for wider access and lower fees, although the documentation is heavier and requires forms such as W-8BEN.
A more popular route for beginners is international mutual funds and ETFs tracking US indices. These offer exposure without the pressure of choosing individual companies. Fractional investing adds another layer of accessibility, allowing small-ticket investments in high-value stocks.
Most investors begin by selecting a platform, completing KYC and transferring funds under LRS. Once remitted, investments typically start with established large-cap stocks or index ETFs. Currency conversion records must be maintained carefully as these are required during tax filing.
Depending on remittance size, forms such as 15CA or 15CB may apply. Investors must also report foreign holdings in their income-tax returns.
Going all-in on trending tech stocks remains a frequent error. Ignoring currency movements or overlooking tax compliance can also complicate returns. Timing the US market and the dollar simultaneously often leads to misjudged decisions.
Investors who avoid concentrating only on tech and spread their exposure across sectors—including healthcare, consumer goods and aerospace—tend to manage volatility better.
A common approach is to keep 10–20% of a portfolio in global equities, depending on individual risk appetite. A strengthening dollar boosts rupee returns, while a weaker dollar trims gains—making currency movements an essential consideration.
Many first-time investors prefer starting with index ETFs. As they become more comfortable, they gradually include individual US stocks. Global exposure has also helped investors cushion volatility in the Indian markets.
As more Indian platforms integrate US markets, fractional investing becomes mainstream and automated reports simplify compliance, overseas investing is becoming seamless. Experts expect the RBI to revisit the LRS cap in the future, which may unlock even more opportunities for Indian investors looking abroad.