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Many of the world's biggest companies, such as Apple, Microsoft, Amazon, NVIDIA, and Meta, are listed on overseas stock exchanges rather than in India. Investing in these companies allows Indian investors to diversify their portfolios and benefit from the growth of global businesses.
In this article, let's look at 3 simple ways to invest in foreign stocks from India, along with their benefits, taxation, and risks.
Key Takeaways
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Overseas brokerage accounts offer direct ownership of foreign stocks.
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Domestic international ETFs provide global exposure through Indian stock exchanges.
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Investors should understand taxes, currency risks, and RBI regulations before investing.
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Foreign investments can help diversify your portfolio by providing exposure to global companies and international markets.
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Understanding taxation, exchange rate movements, investment costs, and regulatory requirements is essential before investing in foreign stocks.
3 Ways to Invest in Foreign Stocks from India
1. Invest Through International Mutual Funds
International mutual funds collect money from Indian investors and invest it in overseas stocks, ETFs, or global mutual funds. Investors buy units of the fund in Indian rupees, and professional fund managers handle the investment decisions.
Benefits
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No need to open an overseas trading account.
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Investment and redemption happen in Indian rupees.
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Suitable for SIP as well as lump sum investments.
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Managed by professional fund managers.
2. Invest Through International ETFs Listed in India
International Exchange Traded Funds (ETFs) allow investors to gain exposure to foreign stock markets while trading on Indian exchanges like the NSE and BSE.
These ETFs track global indices such as the Nasdaq-100, S&P 500, or NYSE FANG+ Index.
Since they are listed in India, investors can buy and sell ETF units using a regular Demat and trading account.
Benefits
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Easy to buy and sell during market hours.
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No overseas account required.
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Lower costs compared to actively managed funds.
3. Open an Overseas Brokerage Account
Investors who want to own shares of companies like Apple, Tesla, Microsoft, or Amazon directly can open an overseas brokerage account.
This route is available under the Reserve Bank of India's Liberalised Remittance Scheme (LRS), which allows resident Indians to remit up to USD 250,000 per financial year for permitted overseas investments.
Benefits
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Direct ownership of foreign company shares.
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Access to thousands of global stocks and ETFs.
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Ability to invest in fractional shares.
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Greater flexibility compared to mutual funds.
Taxation of Foreign Investments
Tax rules depend on the investment route.
1. International Mutual Funds and Fund of Funds
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Short-Term Capital Gains (STCG): If you sell the units within 24 months, the gains are added to your total income and taxed according to your applicable income tax slab.
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Long-Term Capital Gains (LTCG): If you hold the units for more than 24 months, the gains are taxed at a 12.5% rate. Indexation benefits are not available.
2. Direct Foreign Stocks
When you sell foreign stocks at a price higher than your purchase price, the profit is treated as a capital gain.
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Short-Term Capital Gains (STCG): If the shares are sold within 24 months of purchase, the gains are added to your total income and taxed according to your applicable income tax slab.
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Long-Term Capital Gains (LTCG): If the shares are held for more than 24 months, the gains are taxed at 12.5% without indexation benefits.
Things to Keep in Mind Before Investing in Foreign Stocks
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Understand the investment route you are choosing, whether it is a mutual fund, ETF, or direct foreign stock.
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Be aware of currency exchange rate fluctuations, as they can impact your overall returns.
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Check the fees involved, such as brokerage charges, fund expense ratios, and currency conversion costs.
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Follow the RBI's Liberalised Remittance Scheme (LRS) limits if you invest directly in overseas stocks.
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Research the company or fund carefully before investing and ensure it aligns with your financial goals.
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Diversify your investments instead of relying on a single company, sector, or country.
Conclusion
Investing in foreign stocks can help Indian investors build a globally diversified portfolio and participate in the growth of some of the world's leading companies. Whether you choose international mutual funds, global ETFs, or direct stock ownership through an overseas brokerage account, it is important to understand the costs, taxes, regulations, and risks involved.
Disclaimer: Access to US securities is offered via IFSCA Global Access route. Angel One Limited is registered with IFSCA as a Global Access Provider. Investment in securities market is subject to market risks, read all the documents carefully before investing. Any reference to securities is indicative and not a recommendation. Angel One Limited claims no right, title or interest therein, and no endorsement or affiliation is implied. Office address: Unit No. 256, Seats 1 to 4 located on the first floor of Pragya Accelerator II, Building -15B, Block – 15, Road No- 1C, Zone-1, GIFT SEZ, GIFT City, Gandhinagar – 382050. IFSCA Broker-Dealer Registration No. CMI2026BDK1061, GAP Registration No. IFSCA/GAP/BD/2026-2027/016.
