NSE IFSC and India INX are international exchanges based in the International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City).
Investing in US stocks from India: Warren Buffett’s Berkshire Hathaway has the largest holdings in four stocks — Apple, Bank of America, American Express, and Coca-Cola. While replicating the same set of stocks may not be the right approach, the good news is that access to the US stock market will soon become a reality for the Indian investors. Adding global stocks to your domestic portfolio will bring in the much-required advantage of diversification. Owning shares of Facebook, Apple, Amazon, Netflix, and Google – collectively referred to as the FAANG stocks – to the Teslas of the world, the US stock market has all the ingredients for the right portfolio, including several ETFs catering to specific sectors and themes to choose from.
The wait to buy US stocks from India may soon be over. Both NSE and BSE, the two leading stock exchanges in India, have announced their plans to make available an international trading platform for the Indian investors.
NSE International Exchange (NSE IFSC), a wholly owned subsidiary of the National Stock Exchange of India Ltd (NSE), has announced that trading in select US Stocks will soon be facilitated through the NSE IFSC platform.
The India International Exchange (IFSC) Limited (India INX), BSE’s international arm, has also announced it will add international stocks to trading, including shares from major US-listed companies via its wholly owned subsidiary India INX Global Access IFSC Limited .
NSE IFSC and India INX are international exchanges based in the International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City)
Currently, to invest in US stocks one can open an international trading account through any of the foregin trading platforms such as Stockal and can even buy international mutual funds.
India INX proposes to offer stocks from the US, Canada, UK, Europe, Australia, and Japan, covering about 80 percent of the investing universe. Eventually, India INX will in the first phase provide access to over 130 exchanges across 31 countries worldwide covering global exchanges in America, Europe, Asia Pacific and Africa. Some of the exchanges to be offered are NYSE, Nasdaq, LSE, Canadian Securities Exchange, Toronto Stock Exchange, BATs Europe, Euronext France and Tokyo Stock Exchange.
Before you start buying US stocks, you will have to buy dollars from your INR and keep the Liberalized Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India (RBI) in context. Currently, under the LRS rules, any resident individual including a minor ( countersigned by a guardian) is allowed to remit up to 2.5 lakh US dollars (USD 2,50,000 ) in each financial year. At an exchange rate of Rs 74 to a dollar, it is about Rs 1,85,00,000 or Rs 1.85 crore.
Amazon share currently trade at around $3300 which means you need to invest over Rs 2 lakh to buy 1 share of the company. However, that may not be required as all international trading platforms and even NSE IFSC and India INX will allow their own US shares through Fractional ownership. There could be depository receipts issued by the IFSC exchanges between $3 and $5 to make buying US stocks affordable to Indian investors.
It remains to be seen how easy and seamless be the transaction platforms and the cost-effectiveness when it comes to buying global stocks. For the investors, it is certainly a viable option to consider diversifying their portfolio across economies and build a stable stock portfolio for the long term.