India's largest discount brokerages, including Groww, Zerodha, Angel One, Upstox, and Dhan, are gearing up to offer overseas investing through GIFT City, a move that could make it easier for Indian investors to buy global stocks such as Apple, Nvidia, Tesla, and SpaceX, according to a report by the Times of India.
How the GIFT City Route Works
While platforms such as Vested Finance, Borderless, and INDmoney already offer overseas investing, the entry of the country's biggest brokerages is expected to significantly widen access to international markets. Most brokerages are at different stages of launching the service. Some are expected to provide the service directly, while others will partner with a Global Access Provider (GAP), a GIFT City-registered entity that facilitates access to foreign markets.
Once available, investors can open an overseas investment account through their broker's app or website by completing the online KYC process. Funds can then be transferred from an Indian bank account under the Reserve Bank of India's Liberalised Remittance Scheme (LRS), which allows resident Indians to remit up to $250,000 per financial year for permitted purposes, including overseas investments. Banks will also levy foreign exchange conversion charges before investors can begin buying overseas stocks.
Minimum Investment and Fractional Shares
The facility will be available to all Indian residents meeting KYC requirements. NRIs can also invest through GIFT City. There is no high minimum investment requirement. Thanks to fractional investing, investors can start with as little as $1, instead of buying an entire share that may cost hundreds of dollars, according to Dhan. The availability of fractional investing may differ across platforms.
Costs and Regulatory Framework
| Fee Type | Amount / Range | Source |
|---|---|---|
| Brokerage fee | ~25 basis points | Yogesh Darji, MD, HDFC Securities IFSC |
| Forex conversion charge | 1% – 1.5% per transaction | Report |
The key difference from existing platforms is regulation. Companies offering overseas investing through GIFT City are regulated by the GIFT City framework and must comply with its rules. Some existing domestic platforms, by contrast, operate through entities regulated in overseas jurisdictions. Investors remain the beneficial owners of the shares they purchase and are entitled to dividends and other shareholder benefits. The shares are generally held in custody by the broker or investment platform on the investor's behalf.
Tax Implications
According to Nehal Sampat, Partner at Price Waterhouse & Co., the tax treatment depends on whether the investor is a resident Indian or an NRI. Investments made under the RBI's Liberalised Remittance Scheme (LRS) are subject to 20% Tax Collected at Source (TCS). However, trades executed on GIFT City exchanges do not attract Securities Transaction Tax (STT).
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