These 8 US Stocks Will Start Trading At NSE IFSC in GIFT City In Gujarat! How Will It Work?

From March 3rd, the National Stock Exchange’s (NSE) International Financial Services Center (IFSC) platform in Gujarat’s GIFT City has started trading in eight US stocks.

US Stocks On IFSC Platform

Here, Gujarat International Finance Tec-City is an under-construction central business district in Gandhinagar in Gujarat, India.

The NSE IFSC has received approval to trade receipts of 50 US-based stocks as of now. 

To start with, the exchange will start trading in Alphabet Inc, Amazon Inc, Tesla Inc, Meta, Microsoft, Netflix, Apple and Walmart.

Eventually, the 50 largest US companies will be listed on this platform.

How Does This Help?

The date of trading will be decided soon, the sources say. 

It is noteworthy here that the most international mutual funds are not able to invest in the global markets because limits on overseas investing are yet to be enhanced

With this move, NSE IFSC offers another avenue to investors to diversify their portfolios.

Apart from this, some of the other stocks also plan to list on the NSE IFSC platform.

These stocks mainly include companies like Berkshire Hathaway, Mastercard, JP Morgan Chase, Morgan Stanley, Nike, Paypal, Pepsico, Pfizer, Intel among others.

How Does It Work?

This listing does not mean that the US stocks will list in India. 

NSE circular said that market makers will rather buy scrip in the US and issue the unsponsored depositary receipts against them. 

For this, GIFT City, the IFSC Authority will be the sole regulator.

If you want to buy these stocks then you can transact as retail investors on the IFSC platform under the liberalized remittance scheme (LRS) limits which is prescribed by the Reserve Bank of India (RBI). 

Currently, LRS limits stand at $2,50,000 each financial year.

In case of domestic investors, they need to open a demat account at the IFSC.

Further, these stock receipts will be considered as foreign assets for filing income tax returns. 

This will have a slab rate for gains made within two years of purchase and 20% with indexation for gains made after a two years holding period.

The same kind of services are also provided by BSE-owned India International Exchange (India-INX).

It offers international stocks to Indian investors through IFSC. 

In this case BSE acts as an introducing broker for international brokers.