Soon, Groww and Zerodha users could buy US stocks
What's the story
India's leading brokerage firms—Zerodha, Groww, Angel One and Upstox—have received approval from the International Financial Services Centres Authority (IFSCA) to offer international and US stock investing through GIFT City. The move comes as part of a wider trend of increased access to global markets on leading trading platforms. The development comes just as SpaceX's IPO sparked a $4 trillion investment frenzy with public offerings from Anthropic and OpenAI expected later this year.
Investment strategy
GAP registration launched in August
In August, GIFT City launched the Global Access Provider (GAP) registration. This initiative provides customers with a secure and low-cost way to invest internationally without incurring withdrawal costs when bringing money back to India. Zerodha and Upstox will act as broker-dealers while Groww and Angel One will function as global access providers (GAPs).
Trade facilitation
International trading routes for Zerodha and Upstox
To facilitate international investing, Zerodha and Upstox will route trades through foreign clearing firms ViewTrade International, Interactive Brokers, and Alpaca Securities. Only ViewTrade has received GAP approval, while Interactive Brokers and Alpaca are still in the process of launching their products. These specialized firms have deeper ties with US broking firms such as Charles Schwab and Robinhood that facilitate international stocks.
Market trends
International investing gaining traction in India
International investing has been gaining popularity in India as it allows investors to bet on themes like AI, semiconductors, electric vehicles, and space. These sectors have pushed US, South Korean, and Taiwanese markets to new highs while the domestic market remains largely flat. The spike in interest is also fueled by a depreciating rupee, strong IPO pipeline, and the 40% returns that Nasdaq has delivered over the last year.
Investment opportunities
What does this mean for Indian investors?
The approval from IFSCA and the introduction of the GAP framework last year will make global trading simpler and cheaper for Indian investors. The rollout is expected to take two to three months as these platforms complete tech upgrades. With all the buzz around AI stocks and strong Nasdaq performance lately, this move is set to open up more global opportunities for Indian investors.