Have you ever considered investing in opportunities outside India? During the last year, a significant portion of Indian investors have sent their money abroad, choosing Nasdaq as their top investment destination and investing over $1.3 billion.

The same market that supports Apple and Microsoft hosts investment opportunities for you. Investors should consider businesses that function as innovation leaders to achieve better portfolio performance. 

Although your investment targets are ETFs, individual stocks, or mutual funds, you can still invest in Nasdaq from India. The subsequent sections will explain the details, but first, the basics.

What Is Nasdaq?

Nasdaq (National Association of Securities Dealers Automated Quotations)  is a modern stock market, which works online. This is unlike old markets in which traders meet in person. It is synonymous with listing up big tech companies like Apple, Microsoft, and Amazon.

Nasdaq uses two main ways to show stock performance:

• The Nasdaq Composite: This tracks the performance of all stocks listed on Nasdaq
• The Nasdaq-100: This only follows the 100 largest companies on the Nasdaq but doesn’t include banking companies

For beginners, the Nasdaq-100 tends to be more relevant since it focuses on major companies you probably would probably know like Apple and Microsoft.

Moreover, it focuses on 3 major types of companies.

• Tech companies
• Healthcare research companies
• Online shopping and entertainment companies

You can invest in companies helping to usher in tomorrow’s technology and other services like TV, satellites, distribution, communication, and entertainment from Nasdaq.

How to Invest in Nasdaq From India

There are several ways for you to gain access to Nasdaq’s technology-led growth. The three main routes are when you:

1. Buy Nasdaq Stocks Directly
   

Open an International Trading Account

You will need to open an exclusive account for international trading. You have two main options:

• The Easy Way: Here, Indian brokers work with foreign markets. With companies like Vested, Stockal, and INDmoney, starting is simple. They can easily handle this and manage all this paperwork and rules for you so you can focus on the investment.
• The Direct Way: You can use Charles Schwab or TD Ameritrade as brokers for a foreign account. The more tools and lower fees they provide, the more paperwork you will have to complete and possibly have more money in your account.

When selecting a broker, also think about how easily you can move money or funds and how much you will be charged along with whether or not help is available if you need some.

Research and Select Stocks

Got your trading account ready? Now, the fun part is to decide on the stocks to buy. Here’s how to start:

Do your own research: Consult credible sites such as Moneycontrol, Reuters, and Nasdaq’s own webpage to learn about companies you wish to invest in.

Start small: Apple and Amazon, along with the other big tech companies, are exciting opportunities, but play it safe. You can start with little money since many brokers allow you to buy parts of shares.

Pay attention to the news: when companies report earnings or big world events occur, markets change. It is vital to know in order to make good choices. It does not matter if you start slowly and learn as you go along.

Fund the Account and Trade

Are you now ready to start investing? This is how you can load money into your account.

First, know the rules: 

India allows you to send up to $250,000 outside of India for investing at one time. This is known as the Liberalized Remittance Scheme (LRS) rule. You can take your rupees to your bank and change them to dollars.

Watch out for fees:

• Converting money costs about 3 to 5%
• Sending money abroad comes with a price from the banks
• The brokers charge some fees as well

These could eat into your profits, so shop around for the best deals. Do your homework on the bank that you’re planning to approach and get ready with all your paperwork in order as RBI (Reserve Bank of India) mandated.

2. Explore Nasdaq Exchange-Traded Funds (ETFs)

In this case, instead of buying every stock one at a time, you can purchase an ETF. It is similar to buying a basket full of small pieces from many of the top tech companies. 

The most popular one is QQQ, which means with one purchase you get tiny ownership into 100 different Nasdaq companies. Another popular one is VGT, also from Vanguard, which leans into tech company stocks.

There are three main benefits of these funds:

• First, it helps spread your risk, they invest in many companies. 
• Second, most of the time, they require fewer fees than other types of funds. 
• Thirdly, like ordinary stocks, you can buy and sell them as the markets are open.

Part of getting started with these ETFs is opening a brokerage account. Many platforms now let you start with small amounts of money. Services such as Vested or INDmoney make it easy to compare ETFs and make trades.

3. Check Out Nasdaq Index Funds

Investments are made in Nasdaq index funds, which mimic the Nasdaq market’s operation. Unlike ETFs, these funds are managed by professionals who match the market’s movement.

Just a few things different from an ETF. As index funds require more money to begin investing, you buy them directly from investment companies or through the stock market.

When you are investing in India, you have two basic possibilities.

• The first way to do this is to use feeder funds, which are Indian funds investing in US markets. These funds allow you to invest in Indian Rupees, making things easier. 
• Second, you can attempt international mutual funds focusing on Nasdaq stocks.

Investing in these funds can bring about a different tax effect. You might pay less or more in taxes depending on the investments you make. 

Before considering these investments in your portfolio, consider talking to a tax expert about how they could affect your taxes, especially since such deals involve two countries.

Essential Rules and Taxes to Know

Here are the most basic rules to keep in mind before buying U.S. stocks from India:

Money Transfer Rules (LRS)

However, you can send up to $25,0000 (approx 2 crore rupees) abroad every year. This is called as LRS (Liberalized Remittance Scheme). 

This rule was created by the Reserve Bank of India to let Indians invest internationally.

If you want Apple or Microsoft stocks, you will be limited to this yearly limit for converting rupees to dollars you first need to buy.

The following are the basic documents you require to send money abroad.

• Your PAN card
• Recent bank statements
• A form called Form A2

The bank keeps track of how much money you are sending out to prevent you from exceeding the limit.

Taxes on Your US Investments

If you are investing in US stocks, then any money you make from such investments is taxable in India. Here’s how it works:

When You Sell Stocks 

If you sell stocks within 2 years of buying them, your tax would depend on your income tax bracket. Suppose you fall in the 30% tax bracket. In that case, you will pay a 30% tax on your earnings.

If you keep your profits for more than two years before selling, you might pay a 12.5% tax on them. However, this recent change makes long-term investing more attractive.

When You Get Dividends 

With 25% of your dividend payment picked up by your tax, US companies are also an issue. In India, you will have to further add up to that amount and pay tax on it. Don’t worry about double tax payments, as you can take a credit of US tax when you file your Indian taxes.

Important Things to Remember

• Keep good records of when you buy, when you sell, and what exchange rates you used in your calculations.
• As special forms must be used to report all your foreign investments in Indian tax returns, it is mandatory that you report them.
• The moment you try to calculate the profits, you would have to consider everything in dollars and then convert it into rupees using official exchange rates.

All this may seem a lot, but many Indian investors manage to get around these rules. 

The first important thing is to keep good records and know your responsibilities at the very beginning. 

If you are unsure about anything, consulting with a tax professional with international investment experience is always best.

Practical Considerations for Indian Investors

If you want to invest in US stocks from India, then keep these key points in mind:

• Your investment is affected by changes in rupee-dollar rates — be it the value of the Indian rupee vs. the US dollar. There are some platforms that will protect you from these currency risks.
• You can start small — many of the brokers even allow you to buy pieces of expensive stocks for just $1. They are also well suited to beginners because of the risk spread by ETFs.
• Since you are planning to receive a large sum of money, stay updated with financial news and consider a financial advisor.
• Know when to invest money, regardless of how much risk you can take. Spread your investments among different stocks and assets. Make sure the investments you have in check are aligned with your goals.
  

Start Your Global Investment Journey

Investing in the Nasdaq from India is not just about growing your wealth; it’s an opportunity to diversify globally. With the Nasdaq, you gain access to a wide range of tech stocks, ETFs, and index funds, allowing you to invest in some of the world’s leading companies and industries.. 

The trick is to know how it works with international investing. You may feel overwhelmed at first — but don’t stress. Research, perhaps consult an independant financial advisor, and begin small. Soon you will discover the world of Nasdaq and the great opportunities you have in India.