How to Invest in NASDAQ: A Complete Guide for Indian Investors

The National Association of Securities Dealers Automated Quotations (NASDAQ) began operations on 8 February 1971 as the world’s first electronic stock exchange. At that time, most trading floors were crowded, loud, and driven by manual paperwork. The result? Delays and poor transparency. NASDAQ started as an automated quotation system with no actual trading. What made NASDAQ stand out was that, in the 1980s and 1990s, technology giants like Microsoft, Apple, Amazon, and Intel chose NASDAQ as their listing home. As of November 2025, NASDAQ lists over 4,000 companies, collectively valued at over USD 14 trillion.

Did you know? Over 70% of US-listed technology companies are listed on the NASDAQ exchange.

Nasdaq Exchange vs. Nasdaq Composite vs. Nasdaq-100

Parameters	NASDAQ Exchange	NASDAQ Composite	NASDAQ-100
Definition	An American electronic stock exchange where investors buy/sell securities; the second-largest by market cap globally.	A capitalisation-weighted index including almost all stocks listed on the Nasdaq exchange.	A modified market-cap index of the 100 largest non-financial companies listed on the Nasdaq exchange.
Usage	Venue for trading and listing companies.	Gauge for the overall Nasdaq market trend.	Benchmark for large-cap tech/growth portfolios (often tracked by ETFs).
Weighting Method	Not applicable (it is an exchange)	Market-cap weighted index	Modified market-cap weighted index

Why Invest in NASDAQ

Here are some of the benefits of investing in NASDAQ:

• Innovation Leadership: The majority of companies on the NASDAQ are leaders engaged in digital transformation. The segment includes AI, cloud computing, and semiconductors. When you invest here, you back the future‑defining technologies and business models that can promote sustainable growth.
• Sector Diversification: Although known for technology, NASDAQ also includes biotech, healthcare, communication services, consumer discretionary, and industrial innovation. This broad mix helps reduce concentration risk.
• Global Exposure: NASDAQ companies operate across continents. They earn revenue from different international markets. The global footprint reduces dependency on any single economy and allows investors to take part in global digital expansion.
• Currency Diversification: Investment in NASDAQ mitigates domestic currency risk. For example, if you buy NASDAQ index funds and the INR weakens against the USD, the value of your investment in INR terms increases, even if the NASDAQ index remains unchanged.
• Portfolio Balance: Adding the NASDAQ index can help balance a portfolio heavily weighted toward Indian equities, reducing home‑country bias and improving risk‑adjusted returns.

Ways to Invest in NASDAQ

With Vested, you can access the NASDAQ in the following ways:

• Direct Investment: You can go directly to the Vested platform and select the NASDAQ index for investment with as little as USD 1.
• Derivatives: Derivative contracts on NASDAQ let you speculate on price movements or hedge risk without owning the underlying asset. Futures are agreements to buy or sell the index/stock at a set price on a future date; they require margins and move with market volatility. Options give you the right, not obligation, to buy (call) or sell (put) at a fixed price before expiry.
• Index Mutual Funds/FoFs: You can also invest in NASDAQ through index mutual funds or FoFs. A mutual fund directly invests in the underlying securities, while a FoF invests in an international ETF that tracks the same index. 

How Can Indians Invest in NASDAQ?

Yes, Indian residents can invest in NASDAQ through Indian brokers partnering with US firms or through international brokerage platforms.

The maximum investment amount is capped at USD 250,000 under the Liberalised Remittance Scheme (LRS) by the Reserve Bank of India (RBI). This amount includes other overseas remittances such as travel, education, or gifts.

If you wish for a hassle-free investment, turn to Vested. The process starts with completing KYC for registration, followed by funding the platform with Indian rupees, which the platform automatically converts into US dollars. That’s it, you can start your investment journey. 

Trivia  More than 130 exchanges around the world use NASDAQ’s technology systems.

How to Buy NASDAQ Index on Vested (Step-by-Step)

Here is how to buy NASDAQ index from India:  

• Step 1: Visit the Play Store or App Store, depending on your phone, and download the Vested app. You can also directly sign up on the website, too.
• Step 2:  Share your details and upload scanned copies of your PAN card and other ID proofs to complete the KYC.
• Step 3: After online verification, link your bank account to the Vested app and fund your account. The app will convert your deposits into USD as per the RBI’s LRS rules.
• Step 4: Go to the search bar and search for NASDAQ. The details will appear on your screen. 
• Step 5: Scroll the screen, click on the ‘Buy’ option, and then enter the amount. Since Vested permits fractional ownership, you can enter any amount you wish to invest. Once done, confirm your order.
• Step 6: Re-login, and the details of your investment will appear at the top. 

Risks of Investing in the NASDAQ

Some of the risks associated with investing in NASDAQ are:

• Market Volatility: NASDAQ is highly sensitive to market swings. Tech-heavy stocks can experience rapid price fluctuations that can cause significant short-term losses.
• Inflation Pressure: High inflation can lower consumer spending and corporate profits. NASDAQ companies, especially those in tech and consumer services, may face slower growth, which can affect the NASDAQ fund performance.
• Cybersecurity Threats: Tech companies are highly vulnerable to cyberattacks. Breaches can lead to financial losses, reputational damage, and regulatory penalties, affecting NASDAQ ETF performance.
• Dividend Uncertainty: Many NASDAQ companies reinvest profits rather than pay dividends. Investors seeking regular income may face uncertainty, as returns rely solely on capital appreciation.
• Competition Pressure: High-tech sectors face intense global competition. Failure to innovate or maintain market share can lead to declining revenues and stock devaluation while affecting NASDAQ fund performance.

Taxation & Compliance 

Before you invest in NASDAQ from India, there are certain investment and taxation rules you must be aware of.

• TCS Collection: If you are investing over ₹10 lakh in a NASDAQ in any financial year under LRS, the excess will attract 20% tax collected at source (TCS). You can offset the same against tax deducted at source (TDS) for the period using Form 12BAA at the time of filing ITR.
• Mandatory Disclosure: You need to disclose your investments in Schedule FA of the ITR. As per the rules, mention the date and cost of acquisition, broker details, and the total income you have earned from each investment. Non-disclosure attracts a penalty under the Black Money Act.
• Dividend Taxation: If your NASDAQ holdings offers a dividend, you will receive the same in your account after a deduction of withholding tax of 25%. It will be taxed in India as per your income tax slab. However, you can get a foreign tax credit under the India-US Double Taxation Avoidance Agreement (DTAA) by filing Form 67. Before you report your dividend, convert the amount using the SBI TT buying rate on the last day of the month before the month you receive it.
• Capital Gains: Any profit from selling NASDAQ is taxed at the rate of 12.5% if the holding period is over 24 months. If sold before 24 months, the gains are taxed as per your income tax slab.
• FEMA Compliance: As per the Foreign Exchange Management Act (FEMA) rules, investment in NASDAQ funds under LRS is allowed only if you are a resident individual and the investment is made in your own name. You cannot invest in the name of a partnership, trust, company, or joint account, and investments with foreign nationals or NRIs are not permitted.

Did you know? After the dot-com crash, the index dropped more than 75% from its peak.

Conclusion 

Whether you want to invest in NASDAQ, stocks listed on NASDAQ, or any other exchange in the US, Vested has made the whole process a breeze. The best feature of this platform is that you only need USD 1, which is around ₹90, to get started. Also, Vested allows you to sell your holdings with just a few clicks, and once you do that, the proceeds from your holdings are instantly reflected on your Vested platform.