How To Buy Amazon Stock (AMZN) In India

Editor

Published: May 26, 2022, 7:59pm

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International stocks, by and large, have been in the limelight, enticing enthusiastic investors with their spectacular returns, especially those posted by the U.S. tech giants and global disruptive trends such as meme investing that have made room for speculative gains.

Amazon.com Inc. (AMZN) has grown from a humble bookseller that Jeff Bezos started in his garage to the biggest e-commerce company worldwide, complete with web services and advertising business verticals. AMZN has over 200 million Prime members worldwide, and it reported $117 billion in revenue for the first quarter of 2022.

Since Amazon’s initial public offering in May 1997, when its share value clocked in at a measly $1.50, it’s grown more than $2,500 a share. Over the past three years alone, AMZN’s price has risen almost 100%. If those numbers have you eager to hitch your wagon to Jeff Bezos’ rocket, you can now invest in U.S. stocks with the following process. 

How to Buy Amazon Stock (AMZN)

1. Select a Brokerage

An online brokerage is your gateway to buying and selling stocks. In addition to enabling you to purchase AMZN shares, online brokerage accounts also provide a wealth of research, educational materials and account types to help you meet your investing goals.

Traditionally, investments in U.S. stocks have been made through mutual funds with a U.S. or global focus. In recent times, direct investing has been on the uptick and is facilitated either through an international brokerage firm or through an Indian brokerage firm, which has an affiliation with a U.S. brokerage firm. 

In either case, the international brokerage firm buys the shares and holds them in an omnibus for the Indian investor. Thus, the custody of these stocks lies with the U.S. broking houses. Further, the direct investment options entail huge costs in terms of fixed foreign exchange conversion costs for every transaction (approximately INR 500 for every $500) and a high bid-ask (difference between the bank’s buy and sell rates) of 2% from the spot rate.

Fees, services and investment options can vary by broker, so compare multiple brokerages to find the right one for you.

2. Via NSE IFSC 

In a bid to enable Indian investors to diversify their portfolio, the NSE International Financial Services Centre or the NSE IFSC, one of the two recognized stock exchanges in Gujarat International Finance Tec-City (“GIFT City”), has introduced a product offering to enable retail Indian investors to trade in select U.S. stocks, viz., the top 50 stocks by market capitalization and top five exchange traded funds (ETFs) by assets under management, at the IFSC.

GIFT IFSC in Gandhinagar, Gujarat is the maiden IFSC in India. All transactions in the IFSC are carried out in foreign currency other than Indian rupees.

AMZN is traded on the NSE IFSC and can be bought or sold between 9:15 a.m. and 3:30 p.m. IST Monday through Friday. However, NSE does have pre-hours and after-hours trading, which you may be able to access through your online brokerage.

The pre-market trading hours are 9:00 a.m. until 9.15 a.m., and its after-hours trading runs from 3.40 p.m. until 4.00 p.m. IST. ​​If you place an order outside of the hours during which your brokerage allows you to trade, it will be processed once trading resumes.

To invest in AMZN stocks via the NSE IFSC platform, follow these steps:

Step 1. Open a trading account with a brokerage firm that is registered with NSE IFSC, and provide the documents like Aadhaar and Pan card to complete the know your customer (KYC) process. 

Step 2. Add funds to your account to buy and sell stocks. You can use these grants for derivative trading or speculation purposes. 

Step 3. Once you fund your account, you can purchase the AMZN stocks. But, don’t forget it allows you to make a fractional investment only, that is you can have fractional ownership of Amazon stocks. 

3. Indirect Investment

You can indirectly invest through mutual funds (MFs)and exchange traded funds (ETFs) in the U.S. equity market. It can be done with domestic or foreign brokers. You don’t need a trading account for it or need to pay any amount for the deposit. It’s a cost-efficient way to invest in AMZN shares. Many brokerage companies are likely to hold units of the Indian ETFs that track U.S. stock market indices. 

Things to Consider When Investing in Amazon Stock 

  • Make sure that you complete your documentation for the Liberalized Remittance Scheme (LRS) successfully. Strictly follow the rules and regulations put together by the Reserve Bank of India (RBI). According to the RBI, Indian residents can invest up to $2,50,000 in an accounting year.  
  • The best way to invest in U.S. stocks is via direct investment rather than mutual funds and exchange traded funds.
  • Various brokerage firms collaborate with the foreign national banks that will help you get good foreign exchange rates. 
  • The transaction should be done in USD to buy AMZN stocks.

(With inputs from Nikita Tambe and Kat Tretina)

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