economy · 2026-06-17
Zerodha, Groww Get Nod for US Stocks
b8f5a7be-ab3e-4aca-9a0f-335928c0f229
Zerodha, Groww, Angel One, and Upstox got IFSCA clearance to operate as intermediaries out of GIFT CityTwo licence types issued: GAP licences (Groww, Upstox) settle directly with US brokers, while broker-dealers (Zerodha, Angel One) route through a GAP partnerBuilt on RBI's LRS framework, letting individuals remit up to $250K/year abroad. US stock trading volumes from India rose ~20% recently
How does buying US stocks via GIFT City work?
GIFT City acts as a regulatory bridge. A GAP licence holder [like Groww] connects directly with a US broker for settlement. A broker-dealer [like Zerodha] routes trades through a GAP partner who then settles with the US broker. Both use RBI's LRS framework, which permits up to $250K/year in overseas remittances.
What's the difference between GAP and broker?
A GAP licence [held by Groww] means the platform connects directly with a US-based broker to settle trades. A broker-dealer [like Zerodha] cannot settle directly. It must route orders through a GAP-licensed partner first. GAPs carry more regulatory responsibility but offer a shorter settlement chain.
Why does GIFT City matter for this?
GIFT City is India's only International Financial Services Centre, regulated by IFSCA, not SEBI. This lets platforms operate under global financial rules [like dollar-denominated accounts] while still being on Indian soil. It avoids the complexity of setting up a fully foreign subsidiary.
How does LRS fit into this structure?
RBI's Liberalised Remittance Scheme permits residents to send up to [$250K/year] abroad for purposes including investment. All US stock trading through GIFT City uses this channel. The LRS cap sets the ceiling on how much any individual can invest in foreign stocks annually.
What changes for Indian retail investors?
Previously, Indian investors used standalone platforms [like Vested Finance or IndMoney] for US stocks. Now India's four largest brokerages, with tens of millions of existing users, can offer this within their apps. That means no new account setup, familiar interfaces, and potentially lower fees through scale.
Will US stock fees drop with bigger players?
Scale matters. Platforms like [Zerodha with 15Mn+ users] can negotiate lower brokerage and forex spreads with US counterparts than niche players could. Competition among four large brokerages should push costs down, similar to how Indian equity brokerage fees collapsed after discount brokers entered.
Can investors buy fractional US shares?
Yes. Most GIFT City platforms [like Vested Finance] already offer fractional shares, letting investors buy a slice of expensive stocks [like a $200 Apple share for as little as $1]. This makes US markets accessible even for small retail investors in India.
How are US stock gains taxed in India?
US stock gains are taxed as capital gains in India. Short-term gains (held under 24 months) are taxed at your income slab rate. Long-term gains get [20% with indexation benefit]. Dividends from US stocks face a [25% US withholding tax], with partial relief under the India-US tax treaty.
Why are US stock volumes from India rising?
US stock trading volumes from India rose ~20% recently. Three factors drive this: Indian investors wanting portfolio diversification [into names like Apple or Nvidia], strong US market returns attracting capital, and more platforms making access frictionless. LRS remittances for investment have climbed steadily.
How fast is Indian overseas investing growing?
US stock trading volumes from India rose ~20% in the past year. LRS outflows for investment purposes have grown steadily since 2020 [crossing $2Bn annually]. The entry of large brokerages is expected to accelerate this, as their combined user base exceeds 50Mn accounts.
Which US stocks do Indians buy most?
Indian retail investors gravitate toward large-cap US tech names. [Apple, Tesla, Nvidia, Amazon, and Microsoft] consistently rank as the most-traded US stocks on Indian platforms. ETFs tracking the S&P 500 and Nasdaq are also popular for passive diversification.
How does India compare to other markets?
India's overseas investment participation is still low compared to [South Korea or Taiwan], where retail investors actively trade US stocks. Out of India's ~150Mn demat accounts, only a small fraction have used LRS for foreign investing. The new approvals aim to close this gap by reducing friction.
Source: economictimes.indiatimes.com