What’s Happening?
Traditionally, Indian investors invest in US stocks through mutual funds or international brokerage firms. In a bid to make it easier for investors, the NSE International Financial Services Centre (NSE IFSC), one of the two recognised stock exchanges in Gujarat International Finance Tec-City (‘GIFT City’), has introduced a product offering where retail Indian investors can trade in select US stocks, viz., the top 50 stocks by market capitalisation and top 5 exchange-traded funds (ETFs) by assets under management, at the IFSC.
How Do You Invest?
Open an account with India INX directly or through a broker. Complete the KYC process digitally. The investor then funds his/her broking account by remitting money. Investors can place the order the same way they do for Indian stocks. The trades are settled as per the local regulations of the market. The stocks are held in the name of the broker.
There are two costs attached here - brokerage fees and the cost of remittances. The brokerage fee usually is minuscule, subject to your order. The cost of remittance varies from bank to bank. India INX already has tied up with a set of banks and is getting more in-line to offer lower charges to the investors.
What Lies Ahead?
GIFT IFSC has not gained popularity among the masses. Not all product offerings have been made operational and foreign companies are yet to list their securities on IFSC. However, GIFT IFSC is fast evolving. Retail Indian investors seeking a secure medium could consider investing via the two exchanges in GIFT IFSC.
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