Investing in Indian Stock Markets

India is one of the leading emerging nations in the world. Its economic development is reflected in the evolution of the Indian share market too. Many foreign individuals and institutions look to invest in such emerging markets, in order to diversify their portfolio.

The major stock exchanges of India are – the Bombay Stock Exchange (BSE), which is the oldest stock exchange, and the National Stock Exchange (NSE), the largest stock exchange in India. Let us find how to invest in the Indian stock market in the USA.

How to invest in the Indian stock market from the USA?

Here are some of the ways through which you can invest in the Indian stock market from USA:

1. Open demat and trading account with Indian Stock Broker

You can open any Indian brokerage account that is registered with SEBI such as Zerodha, ICICI direct, Kotak securities or HDFC securities of your choice, and start investing in the Indian markets.

2. Open brokerage account with US based broker

You can also open brokerage account with international trading platforms that have access to Indian stock exchanges. For example, interactive brokers, Fidelity, Charles Schwab etc., are available for US investors and provide access to trade on Indian stock exchanges.

3. Exchange Traded Funds (ETFs)

You can get exposure to the Indian stock markets by investing your funds in Exchange Traded Funds (ETFs) that track the Indian markets. Example iShares MSCI Indian ETF, iShares MSCI Indian Small Cap ETF, Wisdom Tree Indian Earnings ETF, Nifty Indian Financials ETF, VanEck Digital India ETF etc.,

4. American Depository Receipt (ADR)

You can invest through an American Depository Receipt (ADR). An ADR is basically an investment certificate that is issued by US banks. The investment certificate offers you ownership to foreign shares. Although they are foreign shares, they are traded on the American stock exchange and are traded in US dollars. The dividends are also paid in USD.

5. Global Depository Receipt (GDR)

You can invest through a Global Depository Receipt (GDR). This is similar to an ADR but it is offered by a global depository and is a certificate of ownership of foreign shares. GDRs are generally traded on American exchanges, European and Asian stock exchanges.

A US Non-resident Indian can open a brokerage account with a trading platform and open either a PIS or Non-PIS account, link it to repatriable or a non-repatriable account and start investing in Indian stock markets.

Investing in the Indian Stock Market from USA

It is noteworthy that investment can be made in Indian stock markets from the US via a platform or medium. If you need to directly invest in the stock market, you need to register yourself as a Foreign Institutional Investor (FII) with the Securities Exchange Board of India (SEBI).