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.
The cost stack on a ₹12 lakh remittance
What the brokerage-free headline actually leaves you paying: the forex markup, a small brokerage, and the tax collected at source.
- Reaches the broker₹11,88,000≈ $13,500
- Permanent cost (forex, brokerage, account fee)₹13,0561.1%
- TCS collected at source (refundable / adjustable)₹40,000
Same function as the site's US investing cost calculator, so the numbers here match the tool. The dollar rate is an input, not a live quote.
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.
| Direct US broker | Indian app with US access | Feeder fund / ETF in India | |
|---|---|---|---|
| Paperwork | Most — W-8BEN, Forms, remittance | Less for you; the app handles the rails | None |
| All-in cost | Cheapest at scale | Slightly wider spreads, rupee funding | Indian expense ratio on top |
| Tax shape | Indian tax on gains, US withholding on dividends | Same | Indian tax only, no US withholding |
| LRS and TCS | Yes | Yes | No |
| Fractional shares | Usually | Usually | Not applicable |
| Best for | Large, patient portfolios | First-time US buyers | Long-term passive US exposure |
Scroll the table sideways for more →
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.