Indian retail investors are rapidly gaining access to U.S. stocks through local trading platforms like Groww and Zerodha, driven by a desire to diversify portfolios amidst the underperformance of India’s domestic markets and the depreciation of the rupee. Companies such as Nvidia, SpaceX, Apple, Alphabet, Amazon, Micron, and Meta are proving to be the most popular choices among early adopters.
This shift represents a significant change from previous limitations that restricted U.S. market access to wealthier individuals, though concerns exist about potential regulatory reconsideration if outward remittances continue to rise.
Major online investment platforms across India are revolutionizing how millions of retail investors access global markets, opening doors to U.S. stocks and exchange-traded funds (ETFs). This surge in interest is largely driven by a desire for diversification, especially as India's domestic markets have been underperforming.
Previously, investing in U.S. assets was primarily restricted to India's wealthier individuals, facilitated by international banks and specialized wealth management firms. Now, platforms like Groww and Zerodha are democratizing this access. Groww, a significant player accounting for over 29% of India's 46 million active brokerage clients, launched its U.S. stock trading feature earlier this month, according to Harsh Jain, the company's chief operating officer and co-founder.
Among early adopters, tech behemoths like NVIDIA, SpaceX, Apple, Alphabet, Amazon, Micron, and Meta are proving most popular. Groww currently offers access to more than 10,000 U.S. stocks, ETFs, and even fractional share ownership.
Zerodha, India's second-largest trading platform with 15% of active clients, is also gearing up for its U.S. stock launch, having commenced beta testing with plans for a full rollout in the coming weeks. Angel One, another prominent brokerage serving 6.7 million retail clients, is reportedly planning to introduce similar U.S. stock trading capabilities on its platform.
Nitin Jain, CEO and director at Kotak Mahindra Asset Management Singapore, highlights a "big interest" among Indian investors, particularly for U.S. tech companies. He observes that retail investors are often drawn to assets that show strong upward momentum, akin to the crypto frenzy witnessed a few years prior.
U.S. Stocks in High Demand
Somnath Mukherjee, vice president of corporate development at Zerodha, notes a longstanding "latent demand" for global investment opportunities in India. This demand has intensified due to the underperformance of the Indian stock market in recent years and the relative absence of major local artificial intelligence players. Furthermore, the persistent depreciation of the Indian rupee against the U.S. dollar is prompting investors to allocate a portion of their portfolios to foreign currency assets.
While India's benchmark Nifty 50 index has seen a decline of nearly 13% since the year began, the S&P 500 in the U.S. has climbed over 12%. This disparity, coupled with a record $32.5 billion in direct equity outflows by foreign investors since January, as reported by NSDL, has put considerable pressure on the Indian market. Experts suggest that with no significant domestic AI companies and comparatively high valuations, investors are gravitating towards markets like South Korea and Taiwan over India.
Data from the Indian central bank reveals a substantial increase in outward remittances for equity and debt investments. In August alone, resident Indians sent over $321 million overseas for this purpose, marking a 111% jump year-over-year. For the financial year ending March 2026, these outward remittances reached $2.6 billion.
Tanvi Kanchan, associate director and head of international business and strategy at Anand Rathi Shares & Stock Brokers, points out that while retail outflows are a small fraction of India's currency reserves, their rise during periods of rupee weakness and U.S. market strength could "amplify pressure at the worst moment." Investment now constitutes about 11.7% of total outward remittances, a notable increase from 5.8% a year ago, indicating a shift from spending to investing abroad for Indians.
The confluence of foreign investor exits and elevated energy costs due to the Iran conflict has already impacted the Indian rupee, necessitating intervention from the central bank. Kotak's Jain cautions that as retail participation in U.S. markets grows, Indian regulators might reconsider their stance on allowing such widespread access.
