Trading in US stocks to start in GIFT City from 3rd March. The NSE-owned exchange in GIFT City (NSE IFSC) in Gujarat will start trading in 8 US stocks and add more subsequently. A quick thread below.
1. Initially trading in 8 big tech giants like Alphabet and Amazon will start on 3rd March. Eventually the 50 largest US companies will be listed.
2. Why would US companies list in India? Well they are not doing so. This is trading in 'unsponsored depository receipts'. Meaning that market makers will buy the shares in the US and issue the receipts against them.
3. How can you invest? Resident Indians can remit up to USD 250,000 to GIFT City through the RBI's LRS (Liberalised Remittance Scheme) route. There you can open a brokerage account and invest.
4. How is this taxed? These investments would be treated on par with any other foreign stocks. This means slab rate for gains made within 2 years of purchase and 20% with indexation for gains made after a 2 year holding period.
5. What are the alternatives? Mutual Funds were a popular way to invest overseas but fresh investments in international funds have been frozen since early February. You can also directly open a brokerage account in the US or any other country to buy foreign stocks.
For more details: livemint.com
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