The rise of artificial intelligence and a wave of upcoming IPOs are expected to drive increased interest among Indian investors in the U.S. markets, according to the founders of Neev Finance. This trend is particularly noticeable among mass affluent investors in India, who are looking towards the U.S. for opportunities to build wealth.

Factors Driving the Trend

• AI Boom: The ongoing artificial intelligence revolution is reshaping global markets. As AI companies prepare for IPOs, they are attracting attention from investors worldwide.
• Desire for Diversification: Investing in U.S. stocks allows Indian investors to diversify their portfolios geographically and tap into the U.S. economy and global markets.
• Potential for Higher Returns: The U.S. stock market has given higher returns compared to the Indian stock market.
• Rupee Depreciation: The strength of the dollar can be an advantage for investors, with the potential for better returns from currency appreciation against the Indian Rupee.

How Indians Can Invest in U.S. Stocks

Indians can invest in the U.S. stock market in the following ways:

• Direct Investment: Opening an overseas trading account with a domestic or foreign broker. Several domestic brokers offer platforms for investing directly in U.S. stocks.
• Indirect Investment: Investing through mutual funds and ETFs that focus on the U.S. market.

Regulations and Taxes

Investing in U.S. stocks from India is legal, but it is subject to regulations and taxes. The Liberalized Remittance Scheme (LRS) allows Indian residents to remit a certain amount of money (up to $250,000 per financial year) for overseas investments. A tax collected at source (TCS) of 20% is applicable on investments exceeding ₹700,000. Capital gains tax is applicable in India for direct investments in U.S. stocks. Short-term capital gains are taxed at the individual's income tax slab rate, while long-term capital gains are taxed at 20% with indexation. Dividends earned on U.S. stock investments are subject to a 25% dividend tax in the U.S.

Platforms for Investing

Several platforms enable Indian investors to invest in U.S. stocks, including:

• INDmoney
• Vested Finance
• Motilal Oswal (RIISE app)
• Fi.Money

These platforms offer various features such as fractional ownership, SIP options, and access to a wide range of U.S. stocks and ETFs.

Considerations

Before investing in U.S. stocks, Indian investors should consider the following:

• Tax implications: Consulting a tax advisor is essential to understand the specific tax implications based on your investment strategy and individual circumstances.
• Fees and charges: Be aware of brokerage fees, foreign exchange conversion fees, and other charges associated with investing in U.S. stocks.
• RBI regulations: Indian residents are only allowed to invest on a delivery basis under the LRS. Intraday trading and derivative trading are not permitted.