{"id":6620,"date":"2026-04-30T12:53:04","date_gmt":"2026-04-30T12:53:04","guid":{"rendered":"https:\/\/www.paytmmoney.com\/blog\/?p=6620"},"modified":"2026-04-30T12:58:45","modified_gmt":"2026-04-30T12:58:45","slug":"how-to-invest-in-global-companies-with-a-small-amount","status":"publish","type":"post","link":"https:\/\/www.paytmmoney.com\/blog\/how-to-invest-in-global-companies-with-a-small-amount\/","title":{"rendered":"How to Invest in Global Companies with a Small Amount"},"content":{"rendered":"

You use Google every day. You stream on Netflix every night. Your phone runs on chips made by TSMC or Qualcomm. Every time you order something, it might ship using Amazon’s logistics. These everyday habits show how easy it is to invest in global companies, even though most Indian investors’ portfolios are still entirely domestic.<\/p>\n

For a long time, this wasn’t a choice. International investing was genuinely out of reach for the average person, expensive, complicated, and reserved for high-net-worth individuals. That has changed. Today, an Indian retail investor can own a slice of Apple, Microsoft, or an S&P 500 index with as little as \u20b9100, and Exchange Traded Funds (ETFs) are often considered one of the more cost-efficient and accessible ways to do it.<\/span><\/p>\n

This guide explains how, covering every route available to Indian investors, the rules that govern them, the costs involved, and what you need to watch out for before you begin.<\/span><\/p>\n

Why Should You Invest in Global Companies at All?<\/b><\/h2>\n

Before getting into the how, it is worth understanding the why, because global investing is not just about owning foreign brand names. It is about building a more resilient portfolio.<\/span><\/p>\n

India’s stock market is one of the fastest-growing in the world, but it is still a single market. It is heavily weighted towards sectors like financials, oil and gas, and consumer goods. World-leading sectors such as semiconductor manufacturing, enterprise cloud computing, electric vehicles, and biotech are either absent or underrepresented in Indian indices. When you invest only in Indian companies, your entire portfolio is exposed to the same set of risks: domestic policy changes, RBI rate decisions, monsoon cycles, and local economic cycles.<\/span><\/p>\n

Adding global exposure changes this equation. When Indian markets underperform, global markets, particularly the US, may hold steady or even rise, and vice versa. This is the core logic behind geographic diversification. It is not about chasing higher returns, though that is a possibility, but about reducing dependence on any single country’s economic performance.<\/span><\/p>\n

Moreover, the Indian Rupee has historically depreciated against the US Dollar over long periods. This currency movement can act as a tailwind or a headwind depending on exchange rate trends, and should not be assumed to always enhance returns.<\/span><\/p>\n

Is It Legal for Indians to Invest in Global Companies?<\/b><\/h2>\n

Yes. Under RBI’s Liberalised Remittance Scheme (LRS), every Indian resident can remit up to USD 250,000 per financial year for investing in foreign securities. The cap is tracked at the PAN level across all platforms combined. Tax Collected at Source (TCS) may apply on overseas remittances above a certain threshold; rules have been revised multiple times recently, so check with your bank before transferring large amounts. TCS paid is adjustable against your final tax liability.<\/span><\/p>\n

An important constraint:<\/b> the SEBI cap. Beyond your individual LRS limit, SEBI has set an industry-wide cap of USD 7 billion on overseas investments by Indian mutual funds, with a USD 1 billion sub-limit for funds investing in overseas ETFs. These caps were breached in 2022 and again in 2024, causing many international mutual funds and FoFs to pause fresh subscriptions. As of 2025\u201326, availability can change month to month. This restriction does not apply to direct overseas investing via LRS; it only affects the mutual fund route.<\/span><\/p>\n

What Are the Different Ways to Invest in Global Companies from India?<\/b><\/h2>\n

There is no single right route. The best way to invest in global companies from India depends on how much you want to invest, whether you already have a demat account, and how involved you want to be. Here are the four main routes available to retail investors today, with ETFs forming a key component across multiple routes.<\/span><\/p>\n

Route 1: International ETFs Listed on Indian Exchanges<\/b><\/h3>\n

If you have a demat account, this is the most frictionless route. ETFs like the Mirae Asset S&P 500 Top 50 ETF trade on NSE\/BSE in rupees, holding the same underlying foreign stocks. No overseas remittance, no forex conversion. Expense ratios typically run 0.1% to 0.5%, well below actively managed international funds. Watch for lower trading volumes and wider bid-ask spreads, and check current subscription status, since several are affected by the SEBI cap.<\/span><\/p>\n

Route 2: International Fund of Funds (FoFs), No Demat Needed<\/b><\/h3>\n

If you don’t have a demat account, FoFs are your route. These are India-domiciled mutual funds that invest in global ETFs (e.g., Vanguard S&P 500, Invesco NASDAQ 100). You invest in rupees; the fund holds the global ETF. Examples: Motilal Oswal S&P 500 Index Fund, Edelweiss US Technology Equity FoF.<\/span><\/p>\n

The trade-off is a slightly higher expense ratio (you pay both the FoF’s fee and the underlying ETF’s), and you transact at end-of-day NAV rather than in real time. Many FoFs are affected by the SEBI cap, so check whether the fund is currently open before investing.<\/span><\/p>\n

Route 3: Direct US Investment via Indian Brokers<\/b><\/h3>\n

Several Indian platforms have tie-ups with US brokers. You can buy US-listed ETFs like SPY (~0.09%), VOO and IVV (~0.03%), or QQQ directly, including fractional units. Rupees move via LRS, funds appear in USD in your overseas account. This route gives you the lowest expense ratios globally and sidesteps the SEBI cap, but adds currency conversion fees (0.5% to 2%), platform charges, and the responsibility for separate tax disclosure.<\/span><\/p>\n

A risk most articles miss: US estate tax.<\/b> US-listed stocks and ETFs held directly are “US-situs” assets. Non-resident aliens (which includes Indian residents) get a US estate tax exemption of only ~USD 60,000 (approximately \u20b950 lakh, depending on exchange rate), far below the multi-million-dollar exemption US citizens get. Holdings above that can be taxed at rates up to 40% on death, and India and the US do not have an estate tax treaty mitigating this. For small portfolios this is a non-issue, but if you plan to hold more than \u20b950 lakh directly in US securities, talk to a cross-border tax advisor.<\/span><\/p>\n

Route 4: GIFT City \/ NSE IFSC<\/b><\/h3>\n

NSE IFSC at GIFT City lets Indian residents buy US-listed stocks and ETFs (including fractional units) through IFSCA-regulated intermediaries. Compared to Route 3, you stay within Indian regulatory jurisdiction, which can mean simpler grievance redressal. Compared to Route 2, you get real US-listed exposure and aren’t subject to the SEBI cap. The ecosystem is still maturing, with fewer platforms and a narrower range of securities. The US estate tax issue still applies.<\/span><\/p>\n

How Much Money Do You Actually Need to Start?<\/b><\/h2>\n

India-listed ETF: \u20b950 to \u20b9500 per unit. FoF SIP: from \u20b9100 (when open). Direct overseas brokerage with fractional units: roughly USD 1 equivalent. Consistency matters more than amount: a \u20b92,000 monthly SIP sustained over 10 years builds meaningful global exposure.<\/span><\/p>\n

Tax Treatment<\/b><\/h2>\n

The taxation of foreign investments in India has changed multiple times recently, and treatment of India-listed international ETFs is genuinely unsettled. Verify with a CA before filing.<\/span><\/p>\n

\n\n\n\n\n\n\n\n
Asset Category<\/th>\nSTCG<\/th>\nLTCG<\/th>\nLT Threshold<\/th>\n<\/tr>\n<\/thead>\n
International FoFs \/ Mutual Funds<\/td>\nSlab Rate<\/td>\n12.5%<\/td>\n24 Months<\/td>\n<\/tr>\n
Direct Foreign Stocks & US-listed ETFs<\/td>\nSlab Rate<\/td>\n12.5%<\/td>\n24 Months<\/td>\n<\/tr>\n
India-Listed International ETFs<\/td>\nSlab Rate<\/td>\n12.5%<\/td>\n12 Months*<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Note:<\/b> LTCG rates mentioned are based on recent Budget 2024 proposals and prevailing interpretations, and may vary depending on final tax rules and asset classification. Some practitioners treat India-listed international ETFs as listed securities (12-month threshold); others apply foreign-investment rules (24 months). Confirm with a tax advisor.<\/span><\/span><\/em><\/p>\n

Dividends are added to your slab-rate income. US dividends typically face ~25% withholding under the India-US treaty; you can claim relief under DTAA via Form 67. Foreign assets must be disclosed in Schedule FA of your ITR if held directly. Non-disclosure attracts Black Money Act penalties, a far bigger risk than the tax itself. India-domiciled mutual funds investing abroad typically do not require Schedule FA disclosure.<\/span><\/p>\n

Common Mistakes Indian Investors Make When Going Global<\/b><\/h2>\n