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How to invest in Foreign Stock Market? – Buy International Stocks

by | Last Updated On October 3, 2022

How to invest in Foreign Stock Market like the US Stock Exchange – The New York Stock Exchange (NYSE) and NASDAQ ?

Here we will learn and understand How to invest in Foreign Stock Market like the US Stock Exchange – The New York Stock Exchange (NYSE) and NASDAQ ?

How to invest in Foreign Stock Market

What is Foreign Stock Market?

Foreign Stock Market are the securities of companies which are located outside geographical or jurisdiction of a Country. For India, Foreign Stock Markets are like:

S# Stock Exchange Country
1. The Global Dow USA
2. Dow Jones USA
3. NASDAQ
 USA
4. DAX Germany
5. FTSE 100 UK
6. CAC 40 France
7. RTS Russia
8. NIKKI Japan
9. Shanghai Composite China
10. Euronext Europe

Is it Possible to Invest in Foreign Stock Market from India?

There are many investors who want to know if it is possible to invest in Foreign Stocks from India?

The answer is YES. It is possible to invest in Foreign Stocks from India. There is 2 ways to invest in Foreign Stock Market:

  • Direct Investment in Foreign Stocks
  • Investment in Foreign Mutual Fund

Understand:

Direct Investment in Foreign Stock

There are 4 ways to invest in Direct Investment in Foreign Stock.

1. Open a Demat A/C with a Local Brokerage Firm Having Collaboration with Foreign Brokerage Firm

The First way to invest in Foreign Stocks is to have a Demat Account with Local Reputed Brokerage Firm who is having collaborations with Foreign Brokerage Firm. Few such Reputed Brokerage Firms are – ICICI Securities, HDFC Securities, Axis Securities and Kotak Securities.

2. Open a Demat A/C with a Foreign Brokerage Firm

The Second way to invest in Foreign Stocks is by having a Demat Account with Foreign Brokerage Firm. There are many Foreign Brokerage Firms with their Branches in India. Few such Brokerage Firms are – TD Ameritrade, Interactive Brokers and Charles Schwab International Account.

3. Invest in Foreign Stocks through NSE IFSC Limited

The Third way to invest through NSE IFSC Limited (NSE IFSC). NSE IFSC is a fully owned subsidiary company of National Stock Exchange of India Limited (NSE) and applied to the SEBI for in-principle approval to establish an international exchange in Gujarat International Finance Tech City – International Financial Service Centre.

For investing through NSE IFSC, there are list of Brokerage Firms who are registered with them. Investors have to open a Demat account with any of these Brokerage firms who are registered in NSE IFSC.If you have already have a Demat Account with any other Brokerage Firm, then you have to fill a simple form and go through their simple process. Through NSE IFSC, customer can invest in TOP 50 shares of America and Customers can also buy Fraction Shares. People can invest in Top US Companies like – Amazon, Apple, Microsoft, Netflix, Meta, Walmart, Tesla and many more.

4. Invest in Foreign Stocks through India International Exchange Limited

The Fourth way to invest in international stocks is through India International Exchange Limited. India INX is India’s first international stock exchange and subsidiary of Bombay Stock Exchange. It is located at the International Financial Services Centre, GIFT City in Gujarat. It is a subsidiary of BSE Limited.For investing through India INX, customer has to open an account with India INX. Customer can transfer fund through some partner Banks and India INX has a partnership with JP Morgan. Through India INX, Customer can invest in TOP 150 shares of 31 countries.

Investment in Foreign Mutual Funds

There are three types of Fund by which customer can invest through Mutual Fund in Foreign Market:

  1. Fund of Funds is pooled investment funds that invest in other types of fund. In this process, Fund Managers directly invest in Foreign Funds. Fund of Funds may be structured as a Mutual Fund, Hedge Fund, Private Equity Fund or Investment Fund. Aditya Birla SL NASDAQ 100 FOF, DSP Global Innovation FOF, Edelweiss US Technology Equity FOF and many more are FOF who are investing in International Markets.
  2. Exchange Traded Fund is a type of pooled investment security which is similar to Index Mutual Fund. ETF is a portfolio of equity, bonds and trade close to its Net asset Value. Some Domestics ETF are investing in Foreign Index. Mirae Asset Hang Sang TECH ETF, Motilal Oswal NASDAQ ETF, Mirae Asset NYSE FANG+ ETF are some ETF that invest directly in Foreign Index.
  3. Domestic Mutual Fund companies that invest in International Markets and Foreign Index. In this process, Domestic Mutual Fund companies or Fund Managers open their account in Foreign Markets and manage their portfolio in Foreign Market. ICICI Pru US Bluechip Fund, Aditya Birla International Equity, DSP Global Allocation, DSP US Flexible are some companies that directly invest in Foreign Market.

Learn:

FAQ – How to invest in Foreign Stock Market

Yes, any Indian Resident can invest in international stocks using any of the above mentioned process. Under the Liberalised Remittance Scheme (LRS) of the RBI, a Resident Indian individual can invest up to US$ 2,50,000 per financial year (April 1 - March 31) in International Markets.

The easiest and most common way to invest in foreign markets is Investment in Foreign Mutual Funds. You can buy exchange-traded funds (ETFs) or mutual funds that hold a basket of global stocks and bonds.

There are NO US Stock Broker in India. You can Invest in US Stock from India via:

Yes, it is Legal for Resident Indian Individuals to invest in foreign stocks from India. It is Legal even under the Liberalised Remittance Scheme of the RBI. Indians can legally buy foreign stocks of Multinational Global Companies like Apple, Amazon, Microsoft, Google, Tesla, General Motors and others that are listed on the US Stock Exchange and other Major Foreign Stock Exchanges.

Conclusion

We hope now you know How to invest in Foreign Stock Market and How to Buy International Stocks. Hope you liked and enjoyed this Article. Please SHARE with others. Thanks!

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Nikesh

Nikesh is a Banker and Experienced Financial and Investment Advisor with over 20 Years of Experience in the Field of Finance and Investment. He possesses vast experience in the field of Stock Market, Mutual Funds and Investment Portfolio Management. Keep visiting for daily dose of Share Trading Tips and Tutorials.

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