Investing in the US market? Know benefits, tax rules and challenges!

Donald Trump taking the oath as the US President for the second time saw US markets soar. The entire world watched closely how Trump might shape his possible economic policies. There were concerns that if Trump implemented his protectionist policies, as widely anticipated by experts, it could impact the global economy and markets adversely, though it might benefit the US markets.

Against this backdrop, many Indian investors might be planning to invest in the US market. In this story, we will discuss different ways one can invest in the US markets and the benefits and challenges of such an investment. What steps would they need to take?

How to invest in the US market?

If you are living in India and want to invest in the US market, you have three primary ways available.

The first option is through a foreign broker, which is the most simple way for direct investment. Several US brokers allow Indian investors to open accounts, and under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), individuals can invest up to USD 250,000 annually.

The second option is via international tie-ups of Indian brokers, such as ICICI Direct, HDFC Securities, and Kotak Securities, which provide the convenience of opening a 3-in-1 account and even allow the purchase of fractional shares of expensive stocks.

Also read: Trump’s Birthright Citizenship Executive Order holds no merit, experts say it’s a political gimmick that’ll be trashed in Court

The third option is investing through mutual funds and ETFs is the simplest and safest approach. Many Indian mutual funds and ETFs track major US indices, such as the S&P 500, offering an easy way to gain exposure to the US market.

Benefits of investing in the US market:

1. Opportunity to share in global companies: Indian investors get the opportunity to invest in companies like Google, Amazon, Apple, and Microsoft. These companies are leading globally and investors can benefit from their growth.
2. Diversification of portfolio: Investing in the US market can diversify your portfolio at the global level, which can balance the risks of the Indian market.
3. Benefits of investing in dollars: Investing in US dollars can give you forex benefits many times.

 » Read More