How to buy Nasdaq Composite index in India
Have you ever wondered if you could own a small piece of the companies you use every day? From the iPhone in your pocket to the shows you stream on Netflix, many of the world’s most famous brands—like Apple, Microsoft, and Amazon—are part of a US stock market list called the Nasdaq.
It might sound like something reserved for Wall Street experts, but investing in the US stock market from India is now simpler than you might think. What was once a complex process has become remarkably accessible, often right from your laptop or phone. This shift means owning a tiny slice of these global innovators is no longer just a dream but a straightforward process.
This guide shows you the straightforward methods available to invest in the Nasdaq from India, helping you understand what it is and the simple steps to be part of the growth story of these top companies.
What is the Nasdaq Index You Keep Hearing About?
You’ve probably heard news anchors talk about the “Nasdaq” hitting a new high. But what is it, exactly? Think of a music chart that lists the top songs. A stock index is very similar—it’s a list of companies. Instead of tracking song popularity, it tracks the combined performance of all the stocks on the list. When people say “the Nasdaq went up,” they mean the average value of the companies on that specific list has increased.
The Nasdaq is famous for being the home of innovation, including many of the global technology and growth companies you use every day, such as Apple, Amazon, Google, Microsoft, and Tesla. Because it’s packed with these forward-thinking businesses, the Nasdaq is often seen as a barometer for the health of the global tech industry.
Essentially, watching the Nasdaq gives you a snapshot of how the world’s biggest innovators are performing. However, when people mention “the Nasdaq,” they could be referring to one of two different versions: a large, comprehensive list or a more exclusive one. Understanding that distinction helps you know exactly what you’re investing in.
The Big List vs. The VIP List: Nasdaq Composite vs. Nasdaq 100
When you hear about “the Nasdaq,” it’s usually one of two indexes: the broad Nasdaq Composite or the more exclusive Nasdaq 100. Think of the Composite as the entire guest list for a massive party, including over 2,500 companies of all sizes. The Nasdaq 100, on the other hand, is the VIP section—an elite group of the biggest and most influential non-financial names on the exchange, ranked by their market capitalization (a measure of a company’s total value).
For investors in India, this distinction is crucial. While the Composite provides a wider view, almost all investment options available here—like ETFs and mutual funds—are designed to follow the Nasdaq 100. This simplifies things. By investing in a Nasdaq 100 fund, you are choosing to focus on the established leaders of technology and innovation like Amazon, Meta (Facebook), and NVIDIA.
Why Look Beyond India? The Power of “Not Putting All Eggs in One Basket”
You’ve almost certainly heard the advice, “Don’t put all your eggs in one basket.” The same wisdom applies directly to investing. If all your money is tied up in the Indian stock market, your portfolio’s success depends entirely on the ups and downs of a single country’s economy. While the Indian market has great potential, relying on it alone can be risky.
By investing in an index like the Nasdaq 100, you are placing some of your eggs in the American basket. The growth of giants like Microsoft and Google is often influenced by different factors—like global technology trends or US consumer spending—than those driving Indian companies. This gives you a stake in a completely different economic engine.
This strategy, known as geographical diversification, can act as a powerful balancing tool. There will be times when the Indian market is slow while the US market is performing well, and vice-versa. Having a foot in both worlds helps smooth out the journey of growing your wealth.
Your “Shopping Basket” for US Stocks: Investing Through ETFs
How do you own a piece of these companies without the impossible task of buying hundreds of individual US stocks? Think of the Nasdaq 100 index as your ultimate shopping list of top American companies. Instead of buying each item one-by-one, you can buy a pre-packed shopping basket that already contains a small piece of everything on the list. In the investment world, this “shopping basket” is called an Exchange-Traded Fund (ETF).
By purchasing just one unit of an ETF, you instantly own a slice of all the companies in the index it tracks. The great news is that several Nasdaq ETFs are available in India on our own stock exchanges. A popular choice is the Motilal Oswal Nasdaq 100 ETF. You can buy and sell units of this ETF through your Demat account, just as you would a share of an Indian company like Reliance or Infosys.
This approach offers flexibility and cost-effectiveness. Because ETFs are traded on the stock market, you can buy or sell them anytime during market hours, and their management fees tend to be quite low. But what if you prefer a more hands-off method? For that, there is another excellent option.
The “Managed Basket” Approach: Investing Through Mutual Funds
If trading on the stock market feels too hands-on, you can invest through a special type of mutual fund called a Fund of Funds (FoF). This is an Indian mutual fund whose main job is to collect money from investors and then invest it into a single international fund, such as a US-based Nasdaq ETF. In essence, a fund manager buys the international “shopping basket” on your behalf.
The biggest difference between this and an ETF comes down to convenience. While you trade an ETF like a share, you buy a mutual fund directly from the fund company or through an investment app. You don’t need a Demat account, and the transaction happens at a price calculated once at the end of the day.
This method is perfect for anyone comfortable with mutual fund investing, especially through a monthly SIP (Systematic Investment Plan). Funds like the Motilal Oswal Nasdaq 100 FoF or the Navi US Total Stock Market FoF offer exactly this kind of simplicity, making it one of the most straightforward ways to begin investing in the US market from India.
The Rules of the Game: Taxes and LRS for US Investing
Investing internationally involves some straightforward rules. The Reserve Bank of India allows every Indian resident to send up to $250,000 (roughly ₹2 crores) abroad each financial year for investments under the Liberalised Remittance Scheme (LRS). For most new investors, this is a very generous limit.
When you sell your US stocks or fund units and make a profit, you will need to pay tax on that capital gain here in India. The tax treatment depends on how long you held the investment. For investments in US stocks or funds, you must hold them for more than 24 months to qualify for the lower long-term capital gains tax rate. If you sell within 24 months, the profit is considered a short-term gain and is taxed at a higher rate. Keeping this two-year timeline in mind is key to smart international investing.
What to Watch Out For: Two Key Risks You Must Know
Investing in the US introduces a factor you don’t see in local investments: Currency Risk. Think of the US Dollar and Indian Rupee as being on a see-saw. When you invest, you convert rupees to dollars. If the dollar strengthens against the rupee while you’re invested, your returns get an extra boost when you convert back. But if the rupee strengthens, it can reduce your gains.
Then there’s the risk you’re already familiar with: Market Risk. The Nasdaq, just like the Nifty or Sensex, has good years and bad years. A company doing well doesn’t guarantee its stock will go up every day. The entire market can dip due to economic changes, and that is a normal part of investing.
The best way to manage both these risks is patience. By planning to stay invested for the long term—ideally over five years—you give the market time to recover from any dips and allow currency fluctuations to average out. This approach helps turn short-term worries into long-term opportunities.
Your Simple 3-Step Plan to Start Investing in the Nasdaq
You’ve moved from simply hearing about the Nasdaq to knowing exactly how to own a piece of it from India. Here is a simple plan to make your first international investment:
- Get Ready: First, ensure your Demat account is active and you are KYC-compliant.
- Choose Your Path: Decide between a Nasdaq 100 ETF (like the Motilal Oswal N100) or a US-focused Mutual Fund available on Indian platforms.
- Invest: Use your brokerage or mutual fund app to search for your chosen fund and place your first order.
With that single action, you move from being a customer of global innovation to being an owner. The next time you see headlines about the Nasdaq, it won’t be distant financial news; it will be a progress report on the world-class companies you now have a stake in. Your journey as a global investor can start today.