US stocks are a genuine diversifier for Indian portfolios — and a minefield of stacked costs for anyone who skips the fine print. Run through these ten before your first buy.
1. The LRS ceiling: $250,000 a year
The RBI lets resident Indians remit up to $250,000 per financial year for investing abroad. Every route below — direct US broker, Indian app, feeder fund — draws from the same limit.
2. Brokerage is the smallest cost
Most US trades are $0 commission. The real stack: 20% TCS above Rs.10 lakh, 0.5–1.5% forex spread each way, 25% US dividend withholding. Stack them first in our US-cost calculator.
3. You can start with $1
Fractional shares mean one Amazon share is optional — most apps let you start from $1. Position-size like a learner, not a lottery ticket.
4. Currency moves both ways
A rising dollar has flattered US returns for a decade; it can also erase a year of stock gains on the way back. Never assume the forex tailwind.
5. The market opens at your dinner time
US exchanges run 9:30am–4pm Eastern — roughly 7:00–8:30pm IST depending on daylight saving. Limit orders beat late-night impulse orders.
6. File your W-8BEN
This one form with your broker locks the 25% treaty withholding on dividends instead of the 30% default — and you need it to claim the credit back in India via Form 67.
7. SIPC is not SEBI
US brokers carry SIPC cover (up to $500,000) against broker failure — it never protects against market losses, and grievance redress sits with US regulators, not SEBI SCORES.
8. Big portfolios meet US estate tax
Above $60,000 in directly held US assets, US estate duty (up to 40%) applies at death. Small starters can ignore it; crore-plus buy-and-hold investors should read our taxation guide.
9. Pick your route deliberately
- Direct US broker (IBKR, Schwab International): cheapest at scale, most paperwork.
- Indian apps (INDmoney, Dhan, Vested and more): INR funding, partner rails, slightly wider spreads.
- Feeder mutual funds/ETFs: simplest tax story and no LRS/TCS friction, but Indian expense ratios.
10. Red flags
- "Guaranteed" US returns, Telegram tip groups, unregistered "advisors" asking for login access.
- Anyone promising to bypass LRS/TCS limits — the violation lands on you.
Next: how US investing from India works, step by step.
Educational content, not financial advice.