Let’s be honest: we all use iPhones, search on Google, and binge-watch Netflix. But for the longest time, Indian investors could only be consumers of these products, not owners.
If you’ve watched the Nasdaq 100 soar over the last decade and felt that “FOMO” (Fear Of Missing Out) while your local portfolio stayed flat, you aren’t alone. The good news? The barriers are largely gone.
Investing in the US stock market from India is no longer reserved for the ultra-wealthy. With the right apps and a bit of regulatory knowledge, you can own a slice of the world’s biggest tech giants today.
This isn’t a theoretical textbook guide. This is a practical walkthrough on how to actually get your money into the Nasdaq, the costs you need to watch out for, and the tax rules that changed in 2025.
Why Look Beyond the Sensex?
Before we talk about How to Invest in Nasdaq from India, let’s briefly touch on why. It’s not just about chasing returns.
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Global Diversification: The Indian market is heavy on banking and finance. The Nasdaq is the home of global innovation—AI, semiconductors, and biotech.
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The Dollar Hedge: This is the secret sauce. If you invest $1,000 and the stock stays flat, but the US Dollar rises against the Indian Rupee (which it historically has), your portfolio value in Rupees still goes up. You win two ways.
Method 1: Direct Investing Apps (The Most Practical Route)
For 95% of retail investors reading this, this is the best path. Fintech startups have revolutionized this space by partnering with US brokers (like DriveWealth) to offer seamless investing.
Popular Apps: Vested, INDmoney, and Stockal.
How it works:
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Sign Up: You complete a paperless KYC using your Pan Card and Aadhar.
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Remit Funds: This is the tricky part. You can’t just UPI money to these apps. You must transfer funds via your bank using the Liberalised Remittance Scheme (LRS).
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Invest: Once the dollars hit your US wallet (usually takes 24–48 hours), you can buy fractional shares.
Real-World Tip: You don’t need to buy a full share of Amazon or Alphabet. These apps allow “fractional investing,” meaning you can invest as little as $10 (approx ₹850) to own 0.05% of a share.
The Hidden Costs No One Tells You About
It’s not entirely “free.” Watch out for these:
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Forex Markup: Your Indian bank will charge a markup (0.5% to 2%) when converting INR to USD.
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Transfer Fees: Sending money abroad often incurs a fixed swift fee (₹500–₹1,500 per transaction).
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Withdrawal Fees: Bringing money back to India often costs between $5 and $20 per withdrawal.
Strategy: Don’t SIP small amounts (e.g., ₹5,000/month) directly. The fixed transfer fees will eat your returns. Instead, accumulate ₹30k–₹50k in your Indian savings account and transfer it in one shot every quarter.
Method 2: International Mutual Funds (The “Passive” Route)
If you don’t want the headache of tracking individual stocks or filing complex taxes, this used to be the golden ticket. You simply buy an Indian Mutual Fund (Fund of Funds) that invests in the Nasdaq 100.
Examples:
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Motilal Oswal Nasdaq 100 ETF/FoF
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Kotak Nasdaq 100 FoF
The Current Problem (2025/2026 Update): The Reserve Bank of India (RBI) has an industry-wide limit ($7 billion) for overseas investments by mutual funds. When this limit is breached, fund houses stop accepting new investments.
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Status Check: Always check if the fund is accepting fresh lumpsum or SIPs before planning this route. If they are paused, Method 1 is your only reliable option.
Method 3: NSE IFSC (GIFT City)
This is a newer, government-backed initiative. You can invest in US stocks via the NSE International Exchange (NSE IFSC) based in GIFT City, Gujarat.
Pros: It’s strictly regulated and keeps your money closer to home. Cons: Liquidity can be lower compared to direct US markets, and the platform interface isn’t as slick as the modern fintech apps yet.
The Taxman Cometh: Taxes & Regulations (2025 Updated)
This is where most people get scared, but it’s manageable if you know the rules.
1. The LRS Limit
Under the Liberalised Remittance Scheme (LRS), a resident Indian can send up to $250,000 (approx ₹2 Crores) abroad per financial year.
2. TCS (Tax Collected at Source)
Effective April 1, 2025, the government provided some relief in the budget:
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Up to ₹10 Lakh remittance: No TCS.
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Above ₹10 Lakh: A 20% TCS applies on the excess amount.
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Note: TCS is not an extra tax cost; it is advanced tax. You can claim it back as a refund when you file your annual Income Tax Return (ITR).
3. Capital Gains Tax (New Rules)
Taxation on foreign stocks changed significantly in the 2024–25 budgets.
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Short Term (Held < 24 months): Added to your income and taxed at your slab rate.
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Long Term (Held > 24 months): Taxed at 12.5% (without indexation benefits).
4. Dividend Tax
Dividends from US stocks are taxed at a flat 25% in the US (deducted before you get the money). Fortunately, thanks to the Double Taxation Avoidance Agreement (DTAA), you can claim credit for this 25% tax when filing your taxes in India so you don’t pay double.
Frequently Asked Questions
1. Is it legal to invest in the Nasdaq from India? Yes, absolutely. The RBI’s LRS scheme specifically allows Indian residents to invest in foreign equities.
2. Can I use UPI to buy US stocks? No. You must transfer funds via net banking using the LRS remittance option. However, apps like INDmoney facilitate this by integrating with specific banks (like IDFC First or SBM) to make the transfer feel almost as instant as UPI.
3. What happens to my shares if the app shuts down? Your shares are not held by the app. They are held by a US custodian (usually DriveWealth) and insured by the SIPC (Securities Investor Protection Corporation) for up to $500,000. If the app fails, your shares remain safe with the custodian.
4. Do I need to file a US Tax Return? Generally, no. As a non-resident alien (in US tax terms), you only pay taxes on dividends (automatically deducted). You do not pay Capital Gains tax in the US; you pay that in India.
Conclusion: Start Small, Think Big
Investing in the Nasdaq is a powerful way to “future-proof” your portfolio. While the transfer fees and tax rules seem daunting initially, the ability to participate in the growth of companies like NVIDIA, Microsoft, and Google is worth the effort for a long-term investor.
Your Next Step: Don’t rush to transfer lakhs immediately. Download one of the apps mentioned above, complete your KYC, and just browse the interface. Once you are comfortable, try a test transfer of $100 to understand the fee structure before committing serious capital.
