Introduction: Go Global With Your Investments
Most Indian investors only invest in Indian stocks. But here's the truth: India is only 5% of global stock market wealth. The other 95% lies in international markets—USA, Europe, Japan, UK.
What if you could invest in Apple, Microsoft, Amazon, Google directly from India with just ₹5,000? What if you could diversify away from Indian market volatility and tap into global mega-trends like AI, cloud computing, and renewable energy?
You CAN! Thanks to the Liberalized Remittance Scheme (LRS), every Indian resident can invest up to ₹1.9 crore ($250,000) in international stocks per financial year WITHOUT any special permission.
This guide explains international investing simply, shows the tax implications, reveals the currency risk, and helps you start buying US stocks from India TODAY.
Why Invest Internationally? 5 Compelling Reasons
India market drops 20%? Your international holdings don't. They provide stability.
Own pieces of Apple ($3 trillion), Microsoft ($3 trillion), Amazon ($2 trillion)—companies too big to exist in India.
US Nasdaq 100 has given 17.62% CAGR (5 years), beating Indian Nifty's 10-12% returns.
AI, cloud computing, electric vehicles, renewable energy—best companies are US/global, not Indian.
If rupee weakens 5%, your US stock holdings gain 5% automatically in rupee terms!
4 Ways to Invest Internationally from India
Way #1: International Mutual Funds (EASIEST - START HERE!)
Indian mutual funds that invest in foreign stocks for you. You invest in rupees, fund manages forex.
Minimum: ₹500-5,000
Examples: Motilal Oswal Nasdaq 100, ICICI Pru MNC Fund, Edelweiss US Tech
Pros: Easy, no currency conversion hassle, professional management
Cons: Fund charges 0.5-1% extra fee
Best for: Beginners, those without forex accounts
Way #2: International ETFs (Low Cost)
Traded funds tracking international indices. Buy like Indian stocks via demat account.
Minimum: ₹5,000+
Examples: Motilal Oswal NASDAQ 100 ETF, SBI Global 75 ETF
Pros: Very low fees (0.05-0.3%), liquid, trade anytime
Cons: Still currency risk, Indian rupee-traded fund
Best for: Cost-conscious investors
Way #3: Direct US Stock Account (MOST CONTROL)
Open US brokerage account (Interactive Brokers, etc.), buy US stocks directly.
Minimum: ₹1,00,000+
Process: Forex remittance via bank → US broker account → Buy stocks
Pros: Best returns, no fund fees, complete control
Cons: Complex paperwork, need forex account, currency risk
Best for: Experienced investors, large amounts
Way #4: ADRs (American Depositary Receipts)
US company shares traded on Indian exchanges (NSE/BSE). Like Indian stocks but foreign companies.
Minimum: ₹1,000+
Examples: Tesla, Apple ADRs trading on Indian platforms
Pros: Buy like Indian stocks, no forex complexity
Cons: Limited options, pricing not real-time
Best for: Those wanting US exposure without forex
The LRS Limit: ₹1.9 Crore Per Year
Every Indian resident can remit up to $250,000 (₹1.9 crore) per financial year for overseas investments WITHOUT any special permission.
What Can Be Invested?
- ✓ Foreign stocks (US, UK, Europe, Asia)
- ✓ International mutual funds & ETFs
- ✓ Foreign bonds & securities
- ✓ Real estate abroad (residential only)
- ✗ Foreign insurance & forex speculation
Important Rules
- ✓ LRS limit is per PERSON, not per family
- ✓ Resets every financial year (April-March)
- ✓ ₹7 lakh+ remittance attracts 5% TCS (Tax Collected at Source)
- ✓ TCS can be claimed back as refund in ITR
- ✓ Requires PAN for verification
Currency Risk: The USD-INR Volatility
What is Currency Risk?
How to Manage Currency Risk?
- ✓ Long-term hold: Currency noise reduces over 5+ years
- ✓ Diversify currencies: US + UK + Europe stocks (different currencies)
- ✓ Use ETFs: Funds rebalance automatically
- ✓ Rupee hedge: If rupee weakens, your US holdings gain value
- ✗ NOT currency hedging: Too complex for retail investors
Tax Treatment: How International Gains are Taxed in India
Short-Term Capital Gains (STCG - Held <12 months)
Tax Rate: 20%
Example: ₹1,00,000 gain × 20% = ₹20,000 tax
Long-Term Capital Gains (LTCG - Held >12 months)
Tax Rate: 12.5% (above ₹1.25 lakh exemption)
Exemption: First ₹1.25 lakh gains = 0% tax (tax-free!)
Example: ₹2,00,000 gain → (₹2L - ₹1.25L) × 12.5% = ₹9,375 tax
Dividend Income (From International Stocks)
Dividends from US stocks: Taxed at slab rate (as per income)
Dividend Tax Credit: 25% (US taxes dividends, India may allow credit)
Double Tax Avoidance Agreement (DTAA): You get tax credit for US taxes paid
Tax Collection at Source (TCS)
Remittance: ₹1-7 lakhs = NO TCS
Remittance: ₹7+ lakhs = 5% TCS
Example:
Remitting ₹10,00,000
TCS @ 5% = ₹50,000
Actual remitted = ₹9,50,000
BUT: You can claim ₹50,000 as refund in ITR (file on time!)
Top International Stock Ideas for Indian Investors
| Company | Sector | Why Great | Risk Level |
|---|---|---|---|
| Apple (AAPL) | Technology | $3T market cap, iPhone moat, services growth | Low |
| Microsoft (MSFT) | Technology | Azure cloud, AI leader (ChatGPT, Copilot) | Low |
| Nvidia (NVDA) | Semiconductors | AI chip leader, 60%+ margins | Medium |
| Tesla (TSLA) | Automotive | EV market leader, AI + batteries | Medium-High |
| Amazon (AMZN) | Tech/Retail | AWS dominance, retail network effects | Low |
How to Start Investing Internationally (Step-by-Step)
Easiest Path: International Mutual Fund
- Step 1: Open Demat Account
- Visit Zerodha, Angel One, or any broker
- Complete KYC (PAN, Aadhaar - 10 minutes)
- Step 2: Search International Fund
- Search "Motilal Oswal Nasdaq 100" or "ICICI MNC"
- Read fund details, expense ratio, holdings
- Step 3: Invest via SIP or Lump Sum
- SIP: ₹500-5,000/month (recommended)
- Lump Sum: ₹10,000+ (one-time)
- Step 4: Hold 5-10 Years
- Don't track daily (currency noise)
- Review annually
Advanced Path: Direct US Broker
- Step 1: Verify LRS Eligibility
- Ensure PAN, NRE account not applicable
- Step 2: Open US Broker Account
- Interactive Brokers or Vested (India-friendly)
- Upload documents (PAN, Aadhaar, proof of address)
- Step 3: Convert INR to USD
- Remit via bank under LRS (get TCS if >7L)
- Bank converts INR to USD
- Step 4: Buy US Stocks
- Login to broker, search Apple/Microsoft
- Buy desired quantity
Common International Investing Mistakes
Problem: US stocks up 20%, but rupee strengthened 10% = net 10% gain
Fix: Expect 60-70% of US returns in rupee terms
Problem: Time zone mismatch, taxes, costs kill returns
Fix: ONLY long-term holding (5+ years)
Problem: Remit ₹2 crore, RBI blocks remainder, regulatory issues
Fix: Stay within ₹1.9 crore/year limit
Problem: Don't claim TCS refund, lose ₹50,000+
Fix: File ITR by July 31, claim TCS refund
Key Points Summary:
- ✅ LRS allows ₹1.9 crore/year: Completely legal, no special permission
- ✅ 4 ways to invest: Mutual funds (easiest), ETFs, Direct broker, ADRs
- ✅ Start small: ₹500-1,000/month via international mutual fund
- ✅ Tax: 12.5% LTCG (>12 months), 20% STCG, 5% TCS on remittances
- ✅ Currency risk: Expect 60-70% of US returns in rupee terms
- ✅ Hold 5-10 years: Long-term beats short-term always
Your Action Plan (THIS MONTH):
- ✓ Open demat account (5 minutes)
- ✓ Search "Motilal Oswal Nasdaq 100 Fund"
- ✓ Invest ₹5,000 (test investment)
- ✓ Setup SIP of ₹1,000/month
- ✓ Hold for 10 years (don't touch!)
- ✓ Build ₹2-3 crore portfolio with global exposure!
Expected Returns (20 Years):
₹1,000/month SIP @ 12% (adjusted for currency) = ₹50 lakhs wealth
PLUS: Global diversification, AI exposure, rupee hedge!
🌍 Think Global. Invest Global. Build Generational Wealth!