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US stocks on Zerodha (status)

Wed, 20 May 2026 00:00:00 +0000

Zerodha does not directly offer US stock trading as of 2026. Indian retail investors who want US equity exposure via Zerodha must use Indian-listed alternatives (international ETFs) or use separate overseas brokers. This article covers the current status and the available alternatives.

Current status

Zerodha’s product line:

Indian equity (NSE, BSE).
Indian F&O.
Indian currency derivatives.
Indian commodities (MCX).
Indian mutual funds (via Coin ).
Indian-listed international ETFs (e.g., Nasdaq 100, MAFANG).

Not directly offered:

Why Zerodha does not offer US stocks

Wed, 20 May 2026 00:00:00 +0000

Zerodha has consistently chosen not to offer direct US stock trading. The Kamath brothers have publicly explained the reasoning, which combines regulatory complexity, operational economics, and strategic focus. This article documents the main reasons.

Regulatory complexity

LRS framework

The Liberalised Remittance Scheme (LRS) limits Indian residents to USD 2.5 lakh per FY for overseas investments. For Zerodha to facilitate US trading:

Must implement LRS-tracking for each client.
Must remit funds via authorised dealers (specific bank coordination).
Must report annually to RBI.
Must handle FEMA compliance.

This adds operational overhead substantially.

China-focused mutual funds for Indian investors

Mon, 18 May 2026 00:00:00 +0000

China-focused mutual funds for Indian investors provide exposure to Chinese equity markets through Hang Seng-based and A-share schemes operated by Indian AMCs. The category sits within the broader international mutual fund framework, subject to the overseas investment cap and the post-2023 debt-oriented tax treatment.

For Indian retail investors, China-focused mutual funds offer:

Geographic diversification: Reducing single-country (India) concentration.
Sector access: Chinese technology, manufacturing, consumer giants.
Currency exposure: USD-based holdings provide INR-depreciation hedge.

The category has faced significant challenges through 2020-2024 including overseas-cap exhaustion, Hong Kong / China regulatory changes, and geopolitical considerations that have affected fund availability and investor sentiment.

Emerging markets mutual funds for Indian investors

Mon, 18 May 2026 00:00:00 +0000

Emerging markets mutual funds for Indian investors provide diversified emerging-market equity exposure typically excluding India (since the home market is already accessible directly). The category sits within the broader international mutual fund framework, with reference benchmarks including MSCI Emerging Markets Index and various Asia ex-Japan indices.

For Indian retail investors, emerging-markets mutual funds offer:

Cross-EM diversification: Spreading exposure across China, Korea, Taiwan, Brazil, South Africa, etc.
Sector breadth: Tech (Korea, Taiwan), commodities (Brazil), consumer (China).
Cycle positioning: EM-rotation tactical plays.

The category is smaller than US-focused funds in Indian retail interest but offers more diversified international exposure than country-specific funds.

Europe-focused mutual funds for Indian investors

Mon, 18 May 2026 00:00:00 +0000

Europe-focused mutual funds for Indian investors provide exposure to European equity markets through Eurozone, UK, and pan-European schemes operated by Indian AMCs. The category sits within the broader international mutual fund framework. Europe is the smaller of the major international fund categories in Indian retail interest, with US-focused funds dominating the segment.

For Indian retail investors, Europe-focused mutual funds offer:

Geographic diversification: Beyond US and Asia.
Sector exposure: European luxury goods (LVMH, Hermes), pharmaceuticals (Novo Nordisk, Roche), industrials (Siemens, ABB).
Currency exposure: EUR and GBP holdings.

The category has historically had limited retail enthusiasm compared to US-focused funds, reflecting:

International equity Fund of Funds (FoF)

Mon, 18 May 2026 00:00:00 +0000

An international equity Fund of Funds (FoF) is a mutual fund scheme that invests in foreign equity mutual fund schemes operated outside India, providing Indian retail investors access to global markets through a familiar mutual fund wrapper. The category is the dominant Indian channel for accessing foreign equity through mutual fund structures, complementing the alternative Liberalised Remittance Scheme (LRS) direct-foreign-investing route.

International equity FoFs are subject to:

The overseas investment cap (USD 7 billion industry, USD 1 billion per AMC).
The post-2023 debt-oriented tax treatment.
Double-TER structure (Indian FoF TER + foreign-fund TER).

For Indian retail investors, the trade-offs versus direct LRS are operational simplicity for the FoF route versus full universe access and potentially lower fees for the LRS route.

International ETFs in India

Mon, 18 May 2026 00:00:00 +0000

International ETFs in India are exchange-traded funds listed on Indian stock exchanges that provide exposure to foreign equity markets through Indian-listed ETF structures. The category enables Indian retail investors to access foreign equity (Nasdaq 100, S&P 500, Hang Seng, FTSE 100, etc.) through standard demat-trading accounts without using the Liberalised Remittance Scheme (LRS) route.

For Indian retail investors, international ETFs offer:

Exchange-traded foreign exposure: Standard demat-account access.
Lower TER than international FoFs: Typically 0.50-1.00 per cent vs 1.50-2.50 per cent for FoFs.
Intraday liquidity: Buy and sell during Indian market hours.
Simpler than LRS direct investing: No foreign-banking requirements.

Major international ETFs in India

Nasdaq 100 focus

Motilal Oswal Nasdaq 100 ETF: The largest Indian Nasdaq 100 ETF.
Mirae Asset NYSE FANG+ ETF: Top FANG+ stocks.
Aditya Birla Sun Life Nasdaq 100 ETF.

S&P 500 focus

Motilal Oswal S&P 500 ETF.
HDFC S&P 500 ETF.

Hang Seng / Chinese exposure

Nippon India Hang Seng BeES.
Mirae Asset Hang Seng TECH ETF.

Operational considerations

Overseas investment cap

Subject to the overseas investment cap :

International FoF vs direct foreign brokerage (via LRS)

Mon, 18 May 2026 00:00:00 +0000

International FoFs vs direct foreign brokerage (via LRS) is the comparison between Indian retail investors’ two principal routes to foreign equity exposure. The choice involves trade-offs across cost, operational complexity, tax treatment, and universe access.

For Indian retail investors:

International FoF : SEBI-approved mutual fund investing in foreign schemes.
Direct foreign brokerage via LRS : US/foreign-broker account funded through annual USD 250,000 LRS limit.

Side-by-side comparison

Dimension	International FoF	Direct LRS Brokerage
Setup complexity	Low (standard MF)	High (foreign broker, banking)
Annual limit	None (subject to overseas cap)	LRS USD 250K per resident
Minimum investment	Rs 100-5,000 (per SIP)	Platform-specific (often nil)
Underlying universe	Approved foreign schemes	Full global universe
TER/cost	1.0-3.75% combined (double-TER)	0.05-0.30% (passive US ETFs)
Currency conversion	AMC manages	Investor responsibility
Foreign tax	None at investor level (AMC handles)	Possible (US estate tax for direct holdings >USD 60K)
Indian tax	Slab rate (post-2023)	Slab rate (post-2023)
Subscription availability	Cap-constrained	Anytime up to LRS limit
Estate complexity	Indian nominee/transmission	Foreign estate considerations

When International FoF is better

Operational simplicity priority: Standard mutual fund workflow.
Smaller foreign allocations: Setup overhead disproportionate.
No foreign-tax complexity: AMC handles foreign-side tax.
SIP-based foreign accumulation: Standard NACH-based SIP.
Inherent diversification preference: Through professionally managed FoF.

When LRS direct is better

Cost-conscious: 0.05-0.30% TER on US ETFs vs 1-3.75% on FoFs.
Larger allocations: USD 50K+ where cost savings material.
Full universe access: Specific stocks/ETFs unavailable via FoF.
Tax-efficiency in some scenarios: Through specific structures.
Tactical flexibility: Direct exchange trading.

Cost impact over 10 years

For Rs 50 lakh foreign-equity allocation over 10 years (assuming 10% gross return):

International mutual funds for Indian investors

Mon, 18 May 2026 00:00:00 +0000

International mutual funds for Indian investors are SEBI-approved mutual fund schemes that invest in foreign equity, debt or other assets, providing geographic diversification beyond Indian markets. The category enables Indian retail investors to participate in global markets through familiar mutual fund structures rather than the more complex Liberalised Remittance Scheme (LRS) direct-foreign-investing route.

International mutual funds in India operate under:

The SEBI master circular on overseas investments by mutual funds.
The overseas investment cap (USD 7 billion industry-wide, USD 1 billion per AMC).
RBI’s FEMA framework for foreign-exchange flows.

For Indian retail investors seeking international diversification, the category offers:

Japan-focused mutual funds for Indian investors

Mon, 18 May 2026 00:00:00 +0000

Japan-focused mutual funds for Indian investors provide exposure to Japanese equity through Nikkei 225 and TOPIX-tracking schemes operated by Indian AMCs. The category has gained meaningful interest from Indian investors following the Nikkei 225’s strong rally through 2023-2024 (the index crossed 40,000 for the first time, reaching all-time highs after a multi-decade lull).

For Indian retail investors, Japan-focused mutual funds offer:

Geographic diversification: Beyond US, Europe, and EM exposures.
Sector exposure: Japanese technology (Sony, Nintendo), automotive (Toyota, Honda), pharmaceuticals (Takeda), industrials.
Currency exposure: JPY-INR dynamics.
Recent strong performance: Multi-year Nikkei rally has attracted retail interest.

Reference benchmarks

Nikkei 225

The Nikkei 225 is the most-recognised Japanese benchmark:

US Mutual Funds available to Indian investors

Mon, 18 May 2026 00:00:00 +0000

US-focused mutual funds available to Indian investors provide exposure to US equity markets through SEBI-approved mutual fund structures. The category includes:

US index funds and ETFs: Tracking S&P 500, Nasdaq 100, Dow Jones, and other US indices.
Active US equity funds: Investing in US stocks through fund-manager selection.
Fund of Funds (FoFs): Investing in foreign mutual funds with US exposure.
Hybrid international funds: Combining US exposure with other markets.

For Indian retail investors seeking US equity diversification, US-focused mutual funds offer the simplest mutual-fund-wrapper alternative to direct US-equity investing through Liberalised Remittance Scheme (LRS) routes. The category is subject to the overseas investment cap (USD 7 billion industry-wide, USD 1 billion per AMC), which has historically caused subscription halts when cap headroom is exhausted.

Taxation of international funds in India

Tue, 12 May 2026 00:00:00 +0000

Taxation of international mutual funds in India changed fundamentally with the Finance Act 2023, which classified most internationally-oriented funds as “specified mutual funds” for units acquired on or after 1 April 2023. Before that date, international funds investing in overseas equity enjoyed the same 20%-with-indexation LTCG treatment as domestic debt funds (after a 36-month holding period). From 1 April 2023, gains on new units of international funds are treated as short-term capital gains regardless of holding period and are taxed at the investor’s income-tax slab rate with no indexation benefit.