Indian investors can invest in international markets by trading some of the indices that are traded on NSE, most importantly Dow Jones and S&P 500. This is the safest and the best way to trade foreign stocks or indices.
Some Indian brokers also give clients an option to open an account with them to trade international stocks, but this is not advisable simply because I presume the cost of opening an account will be high and the paperwork will be humongous. If you really want to trade foreign stocks, it’s best for you to go abroad, live there for a while and then get yourself an account opened with a local broker there. This will get you in the right way and you’ll be able to participate like a local would.
Under liberalized remittance scheme of RBI, resident Indians are allowed to remit upto USD 75,000 in a financial year to invest into stocks. Check this link, RBI allows you to invest, but you cannot trade on any product which might have margin or margin calls (basically any leveraged product like F&O) using this money that you have remitted abroad.
There are a couple of banks who also run brokerages who offer overseas trading account for you to invest into international stocks (note that presently these platforms let you trade mostly stocks listed on the US stock exchanges).
So yeah, you can can open an overseas trading account and get started.
If your view is not on a stock, but on the entire market, there is F&O on a bunch of indices that trade on NSE and BSE, it will be a lot more easier to take a position in them than to open an overseas trading account. Some of the international indices that trade on NSE/BSE are:
If you are want to invest in the US Market ( not trade ), there are proxies available in the form of Indian Mutual Funds investing in US Stocks directly or indirectly through US Mutual Funds. Some of the known names are
1) ICICI Prudential US Bluechip Equity Fund
2) Franklin India Feeder - Franklin U.S. Opportunities Fund
3) DSP BlackRock US Flexible* Equity Fund
It is very simple these days to open an Online Accounts with these Mutual Funds and subscribe directly to these funds ( without a distributor / broker). Some Broking Firms like Sharekhan & HDFC Securities allow you to buy & sell Mutual Funds through their Trading Account ( they act as a distributor).
Just remember that though the investment is in US Equities, these funds investing Overseas are not treated as Equity Funds for the purpose of Income Tax. For Income Tax purposes they are treated as Debt Funds, similar to Fund of Fund Schemes. So you cannot avail 100% exemption from Income Tax, like you would enjoy if invested in an Indian Equity Fund ( and held for a minimum 1 year ).
Sometimes, when the US Equity Markets do very well when compared to the Indian Markets, the post tax returns from these Funds are still higher compared to similar Indian Equity Funds.Year 2012-13 was a case in point.
@Nithin, thanks for the info, never knew about such possibilities.
1 query --> Can we buy, Google or MSFT (equity/individual share) on NSE (Indian Exchange)? If so then HOW?
so can we buy shares of saudi aramco via Zerodha or not?
Through Zerodha, you cannot.
Is it legal to remit money to a foreign(US) stock broker ?
How can we invest in US stocks ? Is there any broker in india thru which we can invest ?
which broker provides these indices like DJIA, NASDAQ? Pls let me know…
Are these indices available on Zerodha or any other?
Not available currently but we are working on something. Give us a few months.
In this financial year the Liberalised Remittance Scheme is $250,000 to invest in USA markets,
Suppose i want to purchase a Berkshire hathaway single stock which cost $326,962 (last traded price)
Will i not able to purchase it? Is there any way? @nithin @siva
Yep, you can’t buy the A shares that you are talking about. But you can buy the B shares, they are at around $200.
Check this for difference in A shares and B shares
When more than one class of stock is offered, companies traditionally designate them as Class A and Class B, with Class A carrying more voting rights than Class B shares. Class A shares may offer 10 voting rights per stock held, while class B shares offer only one. It depends on how the company decides to structure its stock.
Thank you sir for detailed answer👍
Working on it, this is a big project, will take sometime.
if I invest in the USA stock market , sitting from India . and I make profit . will I pay tax in USA or India ?
If you are not U.S citizen and if you are Indian citizen then to have to pay tax to Indian government only.