Daijiworld Media Network - Bengaluru

Bengaluru, Oct 20: Indian brokerage firm Zerodha has launched US stock investing through its Kite platform, allowing eligible resident Indian investors to buy shares in American companies and exchange-traded funds (ETFs) through their existing accounts.

The service provides access to up to 2,000 US-listed companies and around 1,000 ETFs, with fractional investments starting at $1. Investors can activate the international investing facility without opening a separate demat account in India.

However, the service is currently unavailable to non-resident Indians (NRIs), joint account holders and non-individual entities.

The facility operates through BSE-owned India INX Global Access at the International Financial Services Centre (IFSC) in Gujarat's GIFT City. Zerodha's investing guide identifies ViewTrade as its US brokerage partner, with securities held through the overseas broker rather than in an Indian demat account.

Brokerage and additional charges

Zerodha charges brokerage of 0.1 per cent of the transaction value, subject to a minimum of $0.01 and a maximum of $10 per executed order. The fee applies to both buying and selling transactions, with an additional 18 per cent goods and services tax (GST) on brokerage.

The maximum brokerage cap could make larger transactions relatively cheaper. For instance, a $20,000 transaction would attract a brokerage fee of $10 instead of $20 under an uncapped 0.1 per cent rate, excluding taxes and other applicable charges.

However, Zerodha's published information contains a discrepancy regarding regulatory fees. Its detailed investing guide lists an International Financial Services Centres Authority (IFSCA) turnover fee of 0.005 per cent of the trade value and applicable US regulatory charges on sales. The company's main US-investing page, meanwhile, states that these charges are included in the brokerage.

The detailed guide also states that the Financial Industry Regulatory Authority's (FINRA) Trading Activity Fee is suspended from October 1 to December 31, 2026.

Currency conversion costs are another factor for investors. According to Zerodha's current guide, the brokerage has negotiated a bank markup of 0.5 per cent above the Reserve Bank of India's reference exchange rate. Banks may additionally charge remittance fees and applicable taxes.

Funding and investment options

Investors can transfer money from their linked Indian bank accounts into a dollar-denominated Global wallet through net banking. The supported banks include HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IDFC FIRST Bank.

UPI, debit cards and credit cards are not supported for funding the account. Although fractional investments start at $1, the minimum initial fund transfer is $50, while subsequent transfers must be at least $100.

The platform supports delivery-based investments in eligible stocks and ETFs, including fractional shares. Investors can place market and limit orders, but intraday trading, margin trading and derivatives are not available.

The facility also does not support applications for US initial public offerings (IPOs). Newly listed shares can be purchased only if they meet Zerodha's eligibility requirements.

The ETF selection is limited to eligible funds with assets under management exceeding $250 million. Bitcoin ETFs and leveraged ETFs are excluded.

Competition in overseas investing

Zerodha's entry comes as Indian brokerage firms expand their offerings beyond domestic equities. Competitors, including Groww and Upstox, are also seeking to provide retail investors with access to international markets.

Other platforms, such as INDmoney and HDFC Securities, already offer Indian investors access to US equities.

For comparison, Groww lists a brokerage charge of 0.1 per cent of the transaction value, subject to a minimum of $1 per executed order. Its published pricing does not specify a maximum brokerage cap.

The growing availability of international investing platforms is giving Indian investors more options to diversify geographically and gain direct exposure to global businesses, particularly in artificial intelligence, cloud computing and semiconductors.

US-listed companies such as Nvidia, Apple, Microsoft and Amazon are among the prominent businesses attracting investor attention.

Taxation and regulatory requirements

Investments in US stocks are subject to the Reserve Bank of India's Liberalised Remittance Scheme (LRS), which permits resident individuals to remit up to $250,000 per financial year for permitted purposes.

Investors must also account for applicable tax collected at source (TCS) requirements, foreign asset disclosure rules and other relevant tax obligations.

Besides share-price movements, returns can be affected by fluctuations in the rupee-dollar exchange rate, currency conversion charges, taxation and regulatory costs. Investors should therefore consider the overall cost structure and associated risks before investing overseas.