Indian Apps Unlock U.S. Stocks for Millions of Retail Investors

Groww, an Indian investment platform serving over 29% of the country's 46 million active brokerage clients, launched a U.S. equity trading feature earlier this month. The move allows millions of retail investors to buy shares in American companies directly through their local apps. Previously, access to U.S. markets and exchange-traded funds was restricted to wealthier individuals who used global banks or specialized wealth management firms.

Harsh Jain, chief operating officer and co-founder of Groww, told CNBC that the platform now provides access to more than 10,000 U.S. stocks and exchange-traded funds. The service also includes fractional share ownership. Jain listed Nvidia, SpaceX, Apple, Alphabet, Amazon, Micron, and Meta as the most popular choices among early users. This shift marks a major change for Indian retail investors, who have historically focused on domestic listings.

Zerodha, the second-largest trading platform in India with a 15% share of active clients, is also entering the space. The company told CNBC that it has begun beta testing U.S. stock access and plans a full launch within a few weeks. Somnath Mukherjee, vice president of corporate development at Zerodha, stated that there has always been latent demand in India for investing in global companies. He noted that the lack of local artificial intelligence champions and the underperformance of the Indian stock market are driving this interest.

Angel One, another popular brokerage with 6.7 million active retail clients, is reportedly planning a similar launch. Nitin Jain, chief executive and director at Kotak Mahindra Asset Management Singapore, described the interest among Indians in U.S. tech stocks as "big." He compared the current sentiment to the crypto investment frenzy a few years prior, noting that retail investors tend to follow assets that go up.

The domestic market has struggled recently. The Nifty 50, India's benchmark stock index, has dropped nearly 13% since the start of the year. In contrast, the S&P 500 has gained over 12%. Foreign investors have pulled out of the country, resulting in a record $32.5 billion in outflows in direct equities since January, according to data from the Indian depository NSDL. Experts say investors are also bypassing India for markets like South Korea and Taiwan due to the absence of major AI companies and high valuations.

Currency factors also play a role in the decision to invest abroad. Mukherjee said the depreciation of the Indian rupee against the dollar is pushing investors to keep a part of their portfolio in another currency. In August, resident Indians sent over $321 million overseas for equity and debt investments, a 111% increase from the same period last year. For the financial year ended March 2026, outward remittances for investments totaled $2.6 billion.

Tanvi Kanchan, associate director at Anand Rathi Shares & Stock Brokers, pointed out that investment now accounts for about 11.7% of total outward remittances. This is up from 5.8% a year ago, indicating a shift from spending abroad to investing abroad. She warned that these outflows rise exactly when the rupee is weak and U.S. markets look strong. This timing can amplify pressure on the currency at the worst moment.

The central bank has already had to step in to manage currency fluctuations caused by foreign investor exits and rising energy bills linked to the Iran war. As domestic participation in U.S. markets increases, regulators may reconsider their stance. Jain from Kotak Mahindra cautioned that the Indian regulator could have "second thoughts" around allowing retail access to U.S. markets as participation grows.