Buying US stocks through Indian investment platforms has become easier, with services such as Zerodha, Vested and Groww giving Indian investors access to global markets without having to navigate the entire process themselves.
But while these platforms simplify investing, investors should understand what happens to their holdings if they switch providers or their platform stops offering the service. Their US stocks do not automatically become inaccessible or disappear. The next steps depend on where the securities and cash are held, how the account is structured, and whether investors can access the underlying US brokerage account directly.
"In principle, an investor does not lose ownership of their U.S. shares simply because the Indian platform shuts down, provided the assets are properly held through a separate brokerage or custody arrangement. The Indian platform typically facilitates access rather than holding the underlying securities/ funds itself. In such a situation, the shares and cash should continue to remain with the relevant broker or custodian," said Sanjit Singh Paul, smallcase manager and Managing Director, Modulor Global.
When an investor buys US stocks through an Indian app, the app may act as the interface connecting them to an overseas brokerage firm that holds the securities. For instance, if an Indian app shuts down, your assets remain safe because they are held securely by DriveWealth/Alpaca; however, you cannot trade directly on DriveWealth/Alpaca and must instead transfer your account to another broker or request a liquidation. The process may differ across platforms, depending on their arrangements with overseas brokers and custodians.
"Accessing or transferring shares could involve operational inconvenience. If the investor maintains an individual U.S. brokerage account, they may be able to contact the broker directly and request access or initiate a transfer. Under an omnibus arrangement, the process may be more complicated and could require cooperation from the intermediary or its administrator," said Paul.