Investment platform Groww has enabled US stock trading for its entire user base, offering access to over 10,000 US-listed stocks and ETFs. The feature supports fractional investing and charges a 0.1 percent brokerage fee. Investors should carefully consider the implications of currency fluctuations, RBI remittance limits, and tax rules before moving money into international markets.
Investment platform Groww has officially launched its US stock trading feature for all its users after completing a three-week pilot program. This update allows Indian investors to trade over 10,000 US-listed equities and Exchange Traded Funds (ETFs) directly through the Groww digital interface. The platform aims to capture demand from domestic investors who want to diversify their portfolios by gaining exposure to global technology and semiconductor companies.
Global Access and Fractional Shares
A major feature of this update is the ability to buy fractional shares. This means investors do not need to purchase a full share of high-priced stocks, which can sometimes cost thousands of dollars per unit. By allowing smaller investments, the platform lowers the entry barrier for retail participants. Groww has set a brokerage fee of 0.1 percent on the transaction value for these trades. While this fee is transparent, the overall cost of international investing includes other components, such as currency conversion charges and banking fees, which investors should account for when calculating their total investment cost.
Important Considerations for Indian Investors
While the ability to invest in US markets provides geographic and sector-based diversification, it brings unique risks that differ from investing in domestic stocks. First, investors are subject to the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS). Under this scheme, resident individuals can remit up to $250,000 per financial year for various purposes, including investing in foreign securities. Investors must stay within these annual limits.
Second, currency risk is a significant factor. Because the investment is made in US dollars, any change in the exchange rate between the dollar and the Indian rupee directly impacts the investment's return. If the rupee strengthens against the dollar, the value of the foreign investment in rupee terms may decline, even if the stock price remains stable.
Third, investors must be aware of the tax implications. Foreign remittances under the LRS are subject to Tax Collected at Source (TCS) in India, and capital gains from the sale of US stocks are taxed according to Indian income tax laws. Investors should consult their tax advisors to understand the reporting requirements for foreign assets. Finally, the convenience of a single app interface does not eliminate the operational risks associated with third-party service providers who manage the actual movement of funds and execution of trades in the US market. Monitoring the reliability and transparency of these partners remains a necessary step for those committing capital to global markets.