How to Invest in the Dow Jones: A Complete Guide for Indian Investors

Launched in 1896 by Charles Dow and Edward Jones, the Dow Jones Industrial Average (DJIA) initially tracked 12 noted industrial companies of that time. However, as of 2025, it has 30 blue-chip US companies across sectors such as Apple, Microsoft, Johnson & Johnson, Goldman Sachs, and Coca-Cola. What is interesting is that, despite its name, very few members are now purely ‘industrial’ firms. Unlike most US indices, which are market-cap-weighted, the Dow Jones Industrial Average is price-weighted.

The Dow has witnessed several historic transformations. It has survived world wars, the Great Depression, oil shocks, and the 2008 financial crisis. From crossing 1,000 points in 1972 to surpassing 10,000 in 1999 and reaching record highs above 39,000 in the 2020s, the index has mirrored the determination of innovation-driven economies to rise stronger after every challenge.

Did you know? The Great Depression erased nearly 90% of the Dow value from 1929 to 1932.

As of November 2025, the Dow Jones was hovering around 47,700 points. Over the span of five years, despite global turmoil, the index has surged by 59.53%. 

Why Invest in Dow Jones Industrial Average?

The five benefits of investing in Dow Jones are:

• Sectoral Balance: Unlike indices that are heavily weighted toward technology, the DJIA’s 30 constituent companies span healthcare, industrials, consumer staples, and financials. This balance cushions investors against sector-specific downturns. For example, even when tech valuations fluctuate, healthcare and consumer staples can provide stability.
• Global Brand Leadership: DJIA companies include global household names with geographically diversified revenues. This reduces reliance on US domestic demand alone. 
• Dividend Income: Many Dow Jones companies are blue-chip stocks known for stable earnings and reliable dividend payments. These dividends provide investors with regular cash income while they also benefit from long-term price growth.
• Price-weighted Structure: This structure favours established companies with higher nominal share prices rather than mega-cap tech firms whose share prices may be lower due to stock splits. As a result, the DJIA often reflects stable, mature business leaders and reduces over-concentration in overvalued growth stocks.

Trivia General Electric is the only company to have remained in the Dow continuously for more than a century, until 2018.

Ways to Invest in Dow Jones 

With Vested, you can access the Dow Jones in the following ways:

• Direct Stocks: You can directly invest in the shares of individual companies that make up the Dow Jones Industrial Average. The benefit? You personally choose specific stocks, manage timing, risk, and decide on diversification.
• Index Mutual Funds/FoFs: When you invest in index mutual funds, they directly replicate the Dow’s 30 stocks, while FoFs (Funds of Funds) invest in overseas ETFs or funds tracking the Dow. Both offer diversification, passive management, low costs, and exposure to top US companies without directly buying foreign shares.
• Futures & Options: You can also consider derivative instruments based on the Dow Jones Industrial Average. Futures contracts let you buy or sell the index at a fixed price on a future date. On the other hand, options grant the right but not the obligation to buy (call) or sell (put) the index before expiry. You can use them to hedge the risk in your portfolios or to speculate on market movements and volatility.

How Can Indians Invest in the Dow Jones Industrial Average?

If you are an Indian resident looking for direct exposure to US stock exchanges such as Dow Jones–listed stocks, you can either open accounts with Indian brokers partnered with US brokers or use foreign-registered online platforms that allow trading in US equities.

Once your account is opened, the maximum you can invest in a financial year is USD 250,000. This threshold is outlined under the Liberalised Remittance Scheme (LRS) introduced by the Reserve Bank of India. This limit includes other remittances made for education, gifts, or travel.

If you are looking for a trusted partner to start a Dow Jones investment, turn to Vested. With Vested, after completing KYC formalities, linking your Indian bank account, and funding it with rupees, the platform converts your funds into US dollars. You can then start investing with just USD 1 and gain fractional ownership in Dow Jones–listed stocks, regardless of share price.

How to Invest in the Dow Jones Industrial Average?

Here is how to invest in Dow Jones from India:  

• Step 1: Visit the Play Store or App Store on your phone and download the Vested app. You can also sign up directly on the website.
• 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 in accordance with the RBI’s LRS rules.
• Step 4: Go to the search bar and search Dow Jones stocks. The stock 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 your investment details will appear at the top. 

Risks of Investing in the Dow Jones

Some of the risks associated with investing in the Dow Jones index are:

• Currency Risk: Returns are affected by USD–INR fluctuations. Even if the Dow rises, rupee appreciation can reduce profits when converting gains back to INR, or magnify losses during unfavourable exchange-rate movements.
• Market Volatility: The Dow Jones can experience sharp short-term swings due to global events, interest-rate changes, or corporate earnings shocks, creating unpredictable returns and emotional pressure for investors unused to international market volatility.
• Limited Diversification: The Dow has only 30 companies, mainly large-cap US corporations. This narrow composition offers less sector and stock diversification compared to broader indices, increasing risk if a few major constituents underperform.
• Economic Dependence: Dow performance is tied to the US economy. Recessions, inflation spikes, banking crises, or political uncertainty in the US can directly impact Indian portfolios invested in the index.
• Interest-Rate Risk: Decisions by the US Federal Reserve sharply influence equities. Higher rates can compress valuations, negatively impacting Dow Jones returns and causing declines.

Taxation & Compliance

Before you invest in Dow Jones shares, there are certain investment and taxation rules you must be aware of.

• Dividend Income: If the stocks listed on the Dow Jones declare a dividend, the same will be paid to you after deducting 25% withholding tax. The same will again be taxed in India as per your income tax slab. However, you can apply for a foreign tax credit under the India-US Double Taxation Avoidance Agreement (DTAA) by filing Form 67. Make sure the dividend you report is converted using the SBI TT buying rate on the last day of the month before the month you receive it.
• Capital Gains: The profits you make by selling Dow Jones stocks are taxed at a 12.5% rate if sold after 24 months from the date of acquisition. Sales made before this period are subject to tax at your income tax slab, which can be as high as 30%.
• TCS Collection: If, under the LRS, in the financial year you have invested over Rs 10 lakh, the surplus will attract 20% tax collected at source (TCS). You have the option to offset the TCS against tax deducted at source (TDS) for the period by using Form 12BAA at the time of filing your ITR.
• Mandatory Disclosure: Regardless of whether you are investing in Dow Jones-listed stocks or stocks on any other exchange, you need to disclose them in Schedule FA of the ITR even if you are at a loss. As per the rules, disclose the date and cost of acquisition, broker details, and the total income or loss you have made from each investment. Non-disclosure attracts a penalty under the Black Money Act.
• FEMA Compliance: Under the Foreign Exchange Management Act (FEMA) rules, you can invest in Dow Jones stocks in your name as a resident. No investment is allowed under the name of a trust, partnership, or company, or through a joint account, and investments with foreign nationals or NRIs are not permitted.

Conclusion

Investing in the Dow Jones is easier than you think, thanks to Vested. Once you complete the registration process by submitting KYC documents, linking your Indian bank account, and funding it with Indian currency, the platform converts the amount into USD. That’s it. The best aspect? You only need USD 1 to get started, regardless of the share price of Dow Jones stocks. The redemption process is also simple; with just a few taps, you can receive the proceeds in your Vested platform within seconds.