How to invest in global stocks in India

With the rise of artificial intelligence, U.S. tech stocks, especially those like Nvidia, have surged into the spotlight. Nvidia's success story, in particular, has captured the attention of many domestic investors eager to ride the AI boom. But it's not just Nvidia - other Silicon Valley giants are also leading the charge in this tech revolution.

As these companies dominate the global stage, investors are increasingly turning their attention to markets outside of India. The U.S., home to some of the world's most influential tech and consumer companies, brings forth investment opportunities that are hard to match domestically.

In this article, we'll guide you through the different ways to invest in global markets, helping you make informed decisions for a diversified investment portfolio.

Why are Indian investors choosing global markets?

Diversification beyond borders

For a long time, Indian investors have localised their portfolio to domestic names. But even the best-performing local portfolio is prone to corrections brought on by domestic policy changes, rising inflation, or volatility in the rupee. International diversification spreads your risk across countries, reducing your risk of concentration on a single geography.

Exposure to global growth engines

Investing globally means exposure to sectors and companies not well represented in India. Across the globe, innovative technologies are transforming lives and driving significant business revenue. Sectors like biotechnology, AI, and electric vehicles are leading the charge, and companies operating in these areas have immense growth potential.

Identifying these opportunities early can result in substantial profits. Imagine discovering Nvidia before the AI boom - it's a compelling example of the kind of growth potential that exists worldwide. The global market offers investors several opportunities with unparalleled growth potential.

Currency gains

Investing in global stocks also brings the added advantage of currency diversification. With the Indian rupee gradually depreciating against the U.S. dollar over time, holding assets denominated in stronger currencies can enhance your long-term returns.

Suggested read: Beyond borders, beyond rules

What are the different ways to invest in global stocks from India?

Indian investors can explore a host of options today. You can get access to Apple, Google, Tesla, Amazon, etc.; the list is endless. There are two main ways to directly invest in these gems, especially those listed in the U.S.

Here's how you can do it:

Direct investment in foreign stocks

• Through Indian brokers offering international investing
  Many Indian brokers now provide a gateway to international markets through tie-ups with foreign platforms. These include:
  
• Examples: Zerodha, Upstox, HDFC Securities, ICICI Direct, Kotak Securities.
  
• Markets available: Mostly U.S. stocks (Nasdaq, NYSE), sometimes extended to other global markets.
  
• Through international brokerage platforms
  These are global brokers that allow Indians to invest directly in foreign markets.
  
• Examples: Interactive Brokers, Charles Schwab, TD Ameritrade, Vested (tied up with DriveWealth), Stockal, INDmoney.
  
• Fund transfer process
  
• Investors can remit up to USD 250,000 per financial year under the LRS (Liberal Remittance Scheme). This means your investments, foreign trip expenses, abroad education costs, etc., have to be within this limit.
  
• Fund transfers typically require Form A2 and an LRS declaration (integrated in most online banking systems).
  
• Transfers are done via authorised Indian banks through outward remittance in USD.

Investing through mutual funds and ETFs

For those who prefer not to manage foreign accounts or stocks directly, mutual funds and ETFs offer a simpler route.

1. International mutual funds
These are India-based funds that invest in global stocks, directly or via feeder funds.

• Examples:
• Motilal Oswal Nasdaq 100 Fund
  
• Franklin India Feeder - U.S. Opportunities Fund
  
• PGIM Global Equity Opportunities Fund
  
• Easy to access via Indian brokers or AMC websites, with SIP options and no LRS remittance needed.

2. International ETFs
These are ETFs listed in India that track foreign indices.

• Examples:
• Motilal Oswal Nasdaq 100 ETF
  
• Hang Seng ETF
  
• Can be bought and sold like regular stocks through Indian brokerage accounts.

Suggested read: Hang Seng is up 60%. Is it too late to invest?

Mutual funds vs direct stock investing

How does the RBI's Liberalised Remittance Scheme (LRS) work?

If you're investing directly in international stocks, you'll need to comply with the RBI's Liberalised Remittance Scheme (LRS).

• Limit : Under LRS, a resident Indian can remit up to $250,000 per financial year for permissible investments abroad.
  
• Usage : You can use this amount to buy shares, mutual funds, and ETFs. However, derivative trading, margin investing, and crypto investments are not allowed.
  
• Process : You'll need to complete a declaration with your bank before remitting funds abroad.

It's crucial to follow LRS guidelines meticulously to avoid compliance issues or regulatory blocks.

What are the tax implications of global investing?

Understanding taxation is key to avoiding legal issues. Let's take the example of the U.S. and how your investments would be taxed:

• TCS (Tax Collection at Source): You'll be levied 20 per cent on your investment amount, and the remainder will be invested.
  
• DTAA (Double Taxation Avoidance Agreement) : India has tax treaties with countries like the U.S. to avoid double taxation. Here's how it works.
  
• Dividend tax : You'll have to pay a flat rate of 25 per cent in the U.S. And then the remainder of the dividend will be taxed in India. It comes under "income from other sources" and will be taxed as per your slab rate.
  
• Capital gains tax : Profits from selling global shares are taxed in India. If held for more than 24 months, they are considered as long-term capital gains and taxed at 12.5 per cent.
  Meanwhile, investments held for a time period shorter than 24 months are considered short-term capital gains and are taxed at 20 per cent.

Now, when it comes to reporting your investments and investment-related income, it can get quite confusing. We have a guide specific to investments in U.S. assets.

You may check out this helpful guide .

What are the risks involved in investing globally?

As evidenced, it is a bit tricky to report your foreign investments and can lead to serious consequences if not done correctly.

Additionally, the strengthening of the rupee can unexpectedly lead to your assets dwindling in value. So, be wary of currency fluctuations as it can impact the worth of your investments.

How do I choose the right global investments?

Understand the markets

Start by exploring the performance of major indices:

• Developed markets : S&P 500, Dow Jones, NASDAQ, FTSE 100
  
• Emerging markets : MSCI Emerging Markets Index, Shanghai Composite, Brazil's Bovespa

Developed markets tend to offer stability and strong governance, while emerging markets can provide higher returns, but with higher risk.

Use fundamental and technical analysis

Apply the same principles as you would in Indian equities:

• Look for earnings growth, return on equity, and competitive moats
  
• Use technical indicators for timing entry and exit points

If you're investing through funds or ETFs, evaluate past performance, fund manager pedigree, and expense ratio.

Suggested read: How to start investing in stocks

Is global investing right for you?

Investing in global stocks offers Indian investors the chance to diversify portfolios, tap into innovation hubs, and build resilience against local market volatility. But it's not a one-size-fits-all solution.
Ask yourself:

• Am I willing to learn about foreign markets and tax laws?
  
• Can I manage the operational and currency-related risks?
  
• Do I want direct ownership or prefer passive funds?

If the answer is yes, even a modest allocation to global equities can add meaningful value to your investment journey.

After all, global investing is no longer out of reach. With a variety of platforms, funds, and strategies available today, Indian investors have more power than ever to make their portfolios truly global. However, smart investing is about more than chasing returns - it's about gaining clarity.

Also read: Growth vs Value stocks: How to make the right choice

This article was originally published on May 13, 2025.