International ETFs: How Indian Investors Can Get Nasdaq And S&P 500 Exposure

Last Reviewed and Updated: 17 Aug 2026

Three Routes, Not One

Getting exposure to the Nasdaq 100 or the S&P 500 from India runs through three genuinely different structures, each with its own cost, currency handling, and tax treatment.

Route	How It Works	Uses Your LRS Quota
An Indian domiciled international ETF	Listed on NSE, bought like any Indian ETF, in rupees, no foreign account needed	No
An Indian mutual fund or Fund of Funds	A domestic scheme invests in US ETFs on your behalf; supports SIP	No
Direct purchase via an international broker	You open a foreign brokerage account and remit money under the LRS to buy US listed ETFs directly	Yes

The Domestic International ETF: Simplest On Paper

The Motilal Oswal NASDAQ 100 ETF is, as of July 6, 2026, the largest international ETF in India by assets, with roughly Rs 13,282.41 crore under management, tracking the Nasdaq 100 index.

Buying it works exactly like buying any other ETF covered elsewhere in this series, through your existing demat account, in rupees, with no LRS remittance or foreign brokerage account required.

It still carries a genuine currency layer regardless: because the underlying holdings are US listed companies, your actual return depends on both how the Nasdaq itself performs and how the rupee moves against the dollar over the same period.

Why Fresh Money Keeps Hitting A Wall

SEBI caps the Indian mutual fund industry's total overseas investment at USD 7 billion, set in consultation with the RBI, with separate sub limits for individual fund houses and specifically for overseas ETFs. As inflows into international funds have pushed several AMCs close to those limits, fund houses have repeatedly paused fresh subscriptions rather than breach them.

Motilal Oswal halted new SIP investments into its Nasdaq 100 FoF and its S&P 500 Index Fund in January 2025. PGIM India suspended three international Funds of Funds in December 2025.

As of early 2026, only around 28 international mutual funds and 6 international ETFs remained genuinely open to new investment in some form, and even that list shifts as redemptions periodically free up headroom.

The rupee's own weakness is part of why this keeps happening. RBI's own governor has said overseas limits will only be reconsidered once the currency shows durable stability, and it has not been showing much of that recently.

RBI Governor Shaktikanta Das indicated in December 2024 that increases to the overseas investment ceiling would only be considered once the rupee demonstrated durable stability. With the rupee having weakened to around Rs 91.53 per dollar by early 2026, near term relief looks unlikely.

A small number of funds have remained open through this stretch, Navi NASDAQ 100 FoF and Kotak NASDAQ 100 FoF among them as of a recent check, though availability shifts often enough that it is worth confirming directly against the specific AMC's current notice rather than assuming any single article remains accurate for long.

The Direct Route: Your Own LRS Remittance

Opening an account with an international investing platform, Winvesta, Vested, and INDmoney among common options in India, or with a global broker directly, lets you buy actual US listed ETFs such as QQQ or SPY, funded by remitting money under the Liberalised Remittance Scheme, up to USD 250,000 per person per financial year.

Non resident Indians cannot use the LRS route at all. A 20% tax is collected at source on LRS remittances for investment purposes above Rs 10 lakh in a financial year, a threshold worth reconfirming at the time you actually remit, since it has moved before.

US dividends carry a 25% withholding tax at source, reducible from the default 30% by filing a W8BEN form to claim the lower rate available under the India US tax treaty.

The Tax Picture Has Itself Changed Recently

Since April 2023, mutual fund schemes holding under 35% in domestic equity, a category that includes most international funds and Funds of Funds, were taxed entirely as short term gains at the investor's own slab rate, regardless of how long the units were actually held, with no long term treatment available at all.

That rule has since moved again: following Budget 2024 announcements, a 24 month long term capital gains threshold with a flat 12.5% rate has reportedly been reinstated for these specified funds, effective from the 2025 to 2026 financial year, a genuine reversal of part of the harsher 2023 treatment.

This is worth flagging as an area some industry trackers still describe as evolving, and a specific fund's current classification is worth confirming directly rather than assumed from either the older or the newer rule.

Direct holdings of US listed ETFs bought through the LRS route are taxed differently again, as foreign capital assets: short term gains at slab rate within 24 months, long term gains at 12.5% beyond that.

Route	Tax Treatment
Indian international fund or FoF, under 35% domestic equity	Short term at slab rate within 24 months; long term at 12.5%, reportedly reinstated from the 2025 to 2026 financial year, confirm current classification
Direct US listed ETF, bought via LRS	Short term at slab rate within 24 months; long term at 12.5% beyond that, as a foreign capital asset

Note: Two things here move fast enough that an article even a year old can be genuinely wrong. Several Indian international funds have paused fresh subscriptions as the industry bumps against SEBI's overseas investment cap, most recently PGIM India suspending three international Funds of Funds in December 2025, following Motilal Oswal halting new SIPs into its Nasdaq 100 FoF and S&P 500 Index Fund back in January 2025. Separately, the tax treatment of these funds has itself changed more than once in the past few years. Confirm both a specific fund's current subscription status and its current tax classification directly before acting on either.

This article is for general informational purposes only and does not constitute investment, tax, or legal advice. International investing carries currency risk in addition to market risk. Subscription availability for Indian international funds changes frequently and should be confirmed directly with the AMC before investing. Tax treatment described here reflects rules understood as of July 2026, is genuinely evolving, and may change with future notifications or budget announcements. Consult a qualified financial adviser and tax professional before making any investment decision.

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