Trading platform Dhan has introduced a new avenue for Indian investors seeking to diversify their portfolios internationally. Through a new platform based in India's Gujarat International Finance Tec-City (GIFT City), Indian residents can now invest directly in US stocks and Exchange Traded Funds (ETFs) listed on major exchanges like Nasdaq and the New York Stock Exchange (NYSE).
Why Indian Investors Are Looking Towards US Markets
The move comes as many Indian investors increasingly seek global exposure beyond domestic equities. US markets are home to some of the world's largest and most innovative companies across sectors such as artificial intelligence, semiconductors, technology, healthcare, and consumer goods. Investing in these markets provides an opportunity to participate in global growth trends and achieve geographical diversification.
How Dhan's GIFT City Offering Works
Dhan is facilitating these investments through its wholly-owned subsidiary, Raise IFSC Private Limited, which operates as an India INX member under the regulatory framework of the International Financial Services Centres Authority (IFSCA) within GIFT City. This structure ensures compliance with both Reserve Bank of India (RBI) and Foreign Exchange Management Act (FEMA) regulations.
For seamless operations, Dhan has partnered with ViewTrade for brokerage services and GlomoPay for payment processing. Pravin Jadhav, Founder and CEO of Dhan, emphasized that the GIFT City route offers a clear and trusted framework for accessing US equities, addressing previous complexities for Indian investors looking to invest internationally.
Costs and Features for Investors
A key attraction of this new offering is the transparent fee structure. Investors will not incur any account maintenance charges or custody fees. Brokerage charges are set at a competitive 0.25% of the transaction value.
The platform also incorporates features familiar to Indian investors, including Systematic Investment Plans (SIPs) for US stocks and ETFs, advanced 'super orders', and comprehensive portfolio tracking tools with analytics, enhancing the overall investment experience.
Eligibility and Tax Implications
All Indian residents are eligible to invest in stocks and ETFs listed on Nasdaq and NYSE through this platform. However, derivative trading is not currently supported. Fund transfers are integrated with leading Indian banks, ensuring direct and traceable movement of funds into investors' US accounts, with support for timely deposits and withdrawals.
Investors should be aware of the tax implications associated with overseas investments. Dividend income from US stocks will be subject to US withholding tax under the Double Taxation Avoidance Agreement (DTAA), though investors can claim a tax credit in India. Capital gains will be taxed according to Indian regulations: short-term gains at the investor's slab rate, and long-term gains at 12.5%.
For investors aiming to diversify their asset allocation geographically, Dhan's new offering through GIFT City provides a regulated and accessible route to the US equity markets. Experts advise considering such international exposure as part of a long-term strategy rather than focusing on short-term gains.