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 brokerage platforms receive regulatory approval to operate via GIFT City. This landmark move by the International Financial Services Centres Authority (IFSCA) simplifies the process of investing in US equities directly through familiar domestic interfaces.
New Regulatory Approvals for India's Fintech Giants
In a significant boost to cross-border investing, the IFSCA has granted licenses to Zerodha, Groww, Angel One, and Upstox to operate as intermediaries from Gujarat's international finance hub. The regulatory approvals were rolled out in phases: Groww and Zerodha received their clearances on June 2, followed by Angel One on June 12.
The licenses granted vary by business model. Groww and Upstox have been authorized as Global Access Providers (GAP), a model where the platform connects directly with US-based brokers for trade settlement. On the other hand, Zerodha and Angel One have been cleared as broker-dealers. Under this setup, trades are settled indirectly by routing them through a GAP-licensed partner, who then interacts with the US broker.
The Surging Appetite for Global Equities
The entry of these major players comes at a time when Indian interest in foreign markets is reaching new heights. Recent data highlights a massive surge in outbound capital:
- Rapid Capital Outflow: RBI data reveals that Indian investors poured approximately $440 million into global equities in March, marking a 43% year-on-year increase from the $306 million invested in March last year.
- Volatility-Driven Interest: Trading volumes for US stocks from India saw a 20% spike in a single Friday session recently, driven by investor enthusiasm surrounding major US tech developments like SpaceX.
These investments are facilitated under the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS), which allows resident individuals to remit up to $250,000 annually for purposes including foreign stock investments.
GIFT City Emerges as a Fintech Powerhouse
The approval of these brokerages is part of a broader trend of financial activity consolidating in GIFT City. By leveraging the international finance centre, fintech firms are tapping into seamless cross-border money flows.
Groww and Upstox join established players like Vested Finance and INDmoney in the GAP category, creating a competitive landscape for retail investors. Beyond brokerage, the ecosystem is expanding; payment companies are also exploring the GIFT City route to establish wallet services that support similar cross-border transfers, further cementing the hub's role as India's gateway to global finance.
Key Takeaways
- Expanded Access: Major brokers like Zerodha, Groww, Angel One, and Upstox will now allow retail users to invest in US stocks via GIFT City.
- Two Operating Models: The IFSCA has approved both Global Access Providers (direct connection) and Broker-Dealers (indirect routing) to facilitate international trades.
- Explosive Growth: Indian investment in global equities rose by 43% year-on-year in March, reaching $440 million, signaling a massive shift in investor preference toward diversification.