Going global: Step-by-step guide to buying international stocks

Investing in foreign markets like the US allows Indian investors to diversify beyond domestic equities and gain exposure to global stocks. Indians can use various regulatory channels to access international stocks. Here’s a breakdown of how one can get started, how insurance works, what charges apply, brokerage charges, and taxation.

Getting started

Indian residents can invest abroad under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), which allows individuals to remit up to $250,000 per financial year for foreign stocks, overseas-listed exchange-traded funds (ETFs) and other permitted purposes, including travel and education.

To facilitate investing, Indian platforms operate through regulated frameworks. "In August 2025, IFSCA (the regulator for GIFT City) introduced the Global Access Provider (GAP) framework, a regulated channel for Indians to invest in international markets," explained Puneet Maheshwari, director at Upstox.

Platforms such as Upstox and Groww hold GAP licences through their GIFT City entities, alongside direct LRS routes. "The platform acts as the regulated gateway, while accounts are opened in the customer's name with a US broker partner regulated by the SEC and FINRA," noted a Groww spokesperson. Viram Shah, co-founder and CEO of Vested Finance, added that investors can buy listed foreign securities or overseas funds under these rules.

Remittance costs

Once the account is set up, investors transfer rupees, which are converted into foreign currency and remitted abroad.

"Direct bank transfers can be expensive, with FX conversion fees ranging between 1.5% and 2%," noted Shah. "However, platform partnerships with banks help lower FX rates to between 0.5% and 1.5% without the fixed transaction fees."

Tax collected at source (TCS) applies to LRS remittances exceeding ₹10 lakh per financial year. "There is no TCS up to ₹10 lakh annually. Above that, TCS is 20%, which can be claimed back or adjusted in your income tax return," said Maheshwari.

Custody and protection

Investors can buy shares, including fractional shares for as little as $1, according to the platforms. However, Shah cautions that under LRS rules, investors cannot keep cash idle in trading accounts for more than one year.

Shares are held electronically in the US depository system, with investors recorded as beneficial owners. "Each investor's account is opened in their own name with the US broker partner," confirmed the Groww spokesperson.

"Accounts are covered by the Securities Investor Protection Corporation (SIPC) up to $500,000, including up to $250,000 in cash, if the US broker fails," explained Maheshwari. Shah added that SIPC protection mirrors US citizen coverage but does not protect against stock price declines.

Brokerage and forex

Costs vary across platforms and can include brokerage, foreign exchange mark-ups and statutory charges. Upstox charges 0.25% per trade, capped at $25. Groww charges 0.1% or $1 per executed order. Zerodha charges 0.10% of the trade value per order, with a minimum of $0.01 and a maximum of $10 for buying and selling US stocks and ETFs, according to its website.

Forex charges also vary. Upstox's partner-bank conversion typically ranges from 1% to 3.5%, depending on the service provider and transaction type. Zerodha charges a currency-conversion mark-up of 0.4-1.4% above the RBI reference rate, according to its website.

Financial services company Interactive Brokers offers fixed or tiered brokerage. Investors should compare these charges with forex costs and expected trading frequency to identify the most cost-efficient option for their portfolio.

When it comes to taxes, investors need to note that US dividends face a 25% tax deducted at source for Indian residents filing the W-8BEN form, which can be claimed as a Foreign Tax Credit (FTC) by filing Form 67 in India. Because dividends are taxed at applicable income tax slab rates in India, investors in the 30% tax bracket must pay the remaining 5% tax locally after claiming the 25% FTC.

Capital gains are taxed under Indian domestic tax rules. Foreign equities have a 24-month holding-period threshold for long-term capital gains (LTCG), compared with 12 months for domestic listed equities. Short-term capital gains (STCG) on holdings of 24 months or less are taxed at applicable slab rates, while LTCG on holdings exceeding 24 months is taxed at 12.5%.

Investors must also disclose foreign assets, bank accounts and trading accounts in Schedule FA of their income-tax return (ITR-2 or ITR-3) every year, even if they earned no dividends or capital gains during the financial year.

Choose carefully

Pankaj Mathpal, founder of Optima Money Managers, recommends that investors consider international exposure but start with funds rather than individual stocks.

"It would be better to invest through a mutual fund or ETF route. For the mutual fund route, most AMCs are not accepting fresh subscriptions as their limits have already been exhausted, so the international ETF route can be explored. If you want to invest in large names like Amazon, Tesla, or Nvidia, investing in broad indices like the Nasdaq 100 or S&P 500 offers better diversification," said Mathpal.

Many international ETFs listed on domestic exchanges currently trade at premiums to their net asset value (NAV) because domestic fund houses cannot create fresh units after exhausting their RBI overseas investment limits.

"For direct international stocks, people who have good knowledge, the ability to take on higher risk, and a portfolio size over ₹2 crore should consider investing directly, as identifying single stocks may not be easy for a retail investor. If someone is comfortable setting apart a small portion of money they can afford to experiment with or learn from, then they can invest," he added.

Investors can use LRS to build international exposure, but beginners may want to start with ETFs tracking broader overseas indices rather than picking individual stocks.