Zerodha, Groww, Angel One, and Upstox Get Nod to Enable US Stock Trading
Indian retail investors are set to gain seamless access to Wall Street as four of the country's largest fintech giants receive regulatory clearance to operate from GIFT City. This strategic move by major brokerages aims to simplify cross-border investing and tap into the surging appetite for global equities.
Regulatory Breakthrough in GIFT City
The International Financial Services Centres Authority (IFSCA) has officially granted permissions to Zerodha, Groww, Angel One, and Upstox to operate as intermediaries from Gujarat's international finance hub. This regulatory milestone paves the way for millions of Indian retail investors to trade US stocks directly through their preferred domestic platforms.
The licenses were granted in phases: Groww and Upstox received Global Access Provider (GAP) licenses on June 2, while Angel One received its clearance on June 12. Zerodha also secured its approval as a broker-dealer during this period. These approvals mark a significant expansion of the fintech ecosystem within the GIFT City framework.
Understanding the License Models: GAP vs. Broker-Dealer
The IFSCA has approved two distinct operational models, which will dictate how trades are settled for the end consumer:
- Global Access Provider (GAP): Holders like Groww and Upstox connect directly with US-based brokers to manage trade settlements. They join existing players like Vested Finance and INDmoney in this category.
- Broker-Dealer: Holders like Zerodha and Angel One will settle trades indirectly. They will route transactions through a GAP-licensed partner, who in turn coordinates with the US broker.
Despite the technical difference in settlement, both models are designed to facilitate smoother transactions under the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS), which allows Indian residents to remit up to $250,000 annually for overseas investments.
Surging Demand for Global Equities
The move comes at a time when Indian interest in international markets is hitting record highs. Recent data highlights a massive shift in investor behavior:
- Investment Growth: RBI data reveals that Indian investors funneled approximately $440 million into global equities in March, marking a staggering 43% year-on-year increase from the $306 million invested in March of the previous year.
- Volatility and Volume: Trading volumes for US stocks out of India recently saw a 20% spike in a single Friday session, driven by investor excitement surrounding high-profile assets like SpaceX.
The Growing Ecosystem of GIFT City
The entry of these major brokerages is part of a broader trend where fintech firms are flocking to GIFT City to leverage cross-border money flows. Beyond stock trading, payment companies are also exploring the hub to set up wallet services that support international transfers. As more players seek licenses, GIFT City is rapidly evolving into a central node for India's connection to global financial markets.
Key Takeaways
- Major Players Enter: Zerodha, Groww, Angel One, and Upstox are now authorized to facilitate US stock trading via GIFT City.
- Two Operational Paths: Investors will interact with either Global Access Providers (direct US broker connection) or Broker-Dealers (indirect connection via a GAP).
- Massive Market Appetite: Indian outbound investment in global equities grew by 43% year-on-year in March, signaling high demand for simplified US market access.