India, a powerhouse of growth with a massive population, hosts a stock market comprising the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE, dating back to 1875, lists more firms than the NSE. Both exchanges operate electronically, sharing trading hours, mechanisms, and settlement processes regulated by the Securities Exchange Board of India (SEBI). Key market indexes include Sensex and Nifty.

Trading occurs through an order-driven system without market makers, promoting transparency. Settlement follows a T+1 rolling system, and trading hours span 9:15 a.m. to 3:30 p.m. Indian Standard Time, Monday through Friday. SEBI oversees market regulation, shaping rules and imposing penalties for breaches since 1992.

Foreign investors, categorized as Foreign Direct Investment (FDI) or Foreign Portfolio Investment (FPI), must register as foreign institutional investors (FII) for portfolio investments. High-net-worth individuals may register as sub-accounts of an FII. India, the world's fifth-largest economy, facilitates direct investments in stocks for FIIs and their sub-accounts.

Investment avenues include mutual funds, depositary receipts (ADRs/GDRs), exchange-traded funds (ETFs), and exchange-traded notes (ETNs). Participatory notes and offshore instruments offer exposure to Indian stocks. Popular ETFs include iShares MSCI India ETF (INDA) and Wisdom-Tree India Earnings Fund (EPI) as of 2023.

The article concludes by addressing common queries, confirming Americans can invest in the Indian stock market through ETFs or ADRs. India's economic growth, stable financial markets, and potential for increased household savings entering the stock market position it as an emerging market for future growth.

Article courtesy of Manoj Singh, published on Investopedia Read the full article here.