Zerodha, Groww, Angel One, and Upstox Get Nod to Offer US Stocks via GIFT City
Indian retail investors are set to enjoy seamless access to US equity markets as four of the country’s largest brokerage platforms have secured regulatory approvals to operate via GIFT City. This move marks a significant milestone in the democratization of cross-border investing, bridging the gap between Indian domestic wealth and global tech giants.
Regulatory Breakthrough in Gujarat’s Financial Hub
The International Financial Services Centres Authority (IFSCA) has officially granted clearances to Zerodha, Groww, Angel One, and Upstox to act as intermediaries within the GIFT City ecosystem. This regulatory nod allows these fintech giants to facilitate US stock trading for their vast user bases, leveraging the unique international status of Gujarat's financial hub.
The approvals were issued in phases: Groww and Upstox received their Global Access Provider (GAP) licences on June 2, while Angel One followed on June 12. Zerodha also secured its approval on June 2, albeit under a different regulatory structure.
Understanding the Licensing Models: GAP vs. Broker-Dealer
The IFSCA has issued two distinct types of licences, each dictating a different operational workflow for the brokerages:
- Global Access Provider (GAP) Licence: Granted to Groww and Upstox, this model allows them to connect directly with brokers based in the US to manage trade settlements. They join existing players like Vested Finance and INDmoney in this category.
- Broker-Dealer Licence: Granted to Zerodha and Angel One, this model involves an indirect settlement process. These firms will route trades through a GAP-licensed partner, who then interacts with the US-based broker.
Surging Appetite for Global Equities
The expansion of these platforms comes at a time when Indian appetite for overseas markets is at an all-time high. Recent data highlights a massive surge in investor interest:
- Rapid Growth in Remittances: RBI data reveals that Indian investors funneled approximately $440 million into global equities in March, representing a staggering 43% year-on-year increase from $306 million in March of the previous year.
- Trading Volatility: US stock trading volumes from India saw a 20% spike in a single Friday session recently, driven by high-profile market excitement surrounding companies 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 abroad annually for various purposes, including foreign stock investments.
The Growing GIFT City Ecosystem
The entry of major fintech players signals a broader trend of companies looking to GIFT City to tap into cross-border capital flows. Beyond brokerage, payment companies are also exploring the hub to set up wallet services that support seamless international transfers. As more firms seek licences, GIFT City is rapidly evolving into a critical gateway for India's integration with the global financial system.
Key Takeaways
- Major Players Enter: Zerodha, Groww, Angel One, and Upstox are now authorized to facilitate US stock trading via GIFT City.
- Dual Licensing Framework: The expansion utilizes both GAP licences (direct US connection) and Broker-Dealer licences (indirect settlement through partners).
- Massive Investor Demand: Indian capital outflow into global equities grew 43% YoY in March, reaching $440 million, driven by the LRS framework.