Buy US Stocks: The way you buy stocks like Reliance, Infosys and Tata Motors, now you can easily buy stocks of American companies like Amazon, Google and Tesla too.
Buying US Stocks: The way you buy stocks like Reliance, Infosys and Tata Motors, now you can easily buy stocks of American companies like Amazon, Google and Tesla too. In the last four years, there has been a spectacular rise in US tech stocks and now Indian investors can easily take advantage of this boom. NSE International Exchange, a subsidiary of domestic equity benchmark index NSE, has started trading for Indian investors from March 3.
The NSE International Exchange is located in GIFT City, Gujarat and the purchase of American shares will be done through Unsponsored Depository Receipts (DR). GIFT City IFAC is a Special Economic Zone (SEZ) created to attract foreign investment and export of financial services in India.
How can you start buying US stocks?
- Open your trading and demat account with brokers registered with NSE IFAC. Here you can see the complete list of all the registered brokers-
- After that send money from your local bank account to NSE IFSC Registered Brokers bank account.
- Now you can easily buy NSE IFSC US Stocks once the money is in the broker’s account.
- Indian investors can invest money through this platform in companies like Apple, Microsoft, Amazon, Tesla, Alphabet, Meta and Walmart. You can see the complete list of companies whose stocks you can buy here-
- Trading will take place from 8 PM to 2.:30 AM (2:00 PM) Indian time.
- You will be able to invest up to a maximum of $ 2.5 lakh (Rs 191.14 lakh) every year because sending money in a gift is considered as money transfer outside India using LRS (Liberalized Remittance Scheme). RBI has fixed its limit at $ 2.5 lakh annually. Apart from this, one cannot buy margin products through LRS.
- Trading will be in US Dollars.
Can invest earlier also, now this change happened
Indians could buy in US stocks earlier also but there were some problems too. For example, for sending money to international brokers, there is a charge of up to Rs 300-1000. Apart from this, the cost of getting the money back can be even more. Due to this, the profit of small investors decreases. Whereas most of the Indian platforms partner with US brokers but here investors are not able to trust as both the platform and the foreign broker are not under the jurisdiction of the Indian regulator. In such a situation, if there is any problem then working with an international regulator can be a challenge.
NSE IFSC has found a way to overcome these problems. While sending money in GIFT, there are Indian banks at one end of the remittance, now if there is an Indian bank on the other side too, the cost can be reduced. Also there is no trust issue with NSE IFSC and trading activities will be under the regulatory purview of IFSC authority.
What is Unsponsored DR?
A company listed in a country issues a Depository Receipt (DR) to attract investors from another country. If the company offers DR on its own then it is Sponsored DR and if the company is not involved in it then it is called Unsponsored DR. Companies like Infosys, ICICI Bank, Wipro from India trade on the American stock exchange through DR. DRs traded on NSE IFSC are unsponsored. NSE IFSC has partnered with an international custodian who will store shares in the US on behalf of NSE IFSC and then the custodian will issue DR to the NSE IFSC depository account in India. After this trading will start on their NSE IFSC.
,Input: NSC IFSC, Zerodha)