Overview

• Chinese stocks offer a bargain compared to US markets, allowing Indian investors to enter the world's second-largest economy at a discount.

• The most practical and secure route for Indians to bypass direct market restrictions is through US-listed ETFs like MCHI or KWEB, which offer diversified exposure and are traded in US dollars.

• Investing in Chinese stocks is fully legal for Indians under the RBI's Liberalised Remittance Scheme (LRS). You would have to adhere to tax rules like the 12.5% LTCG tax for holdings over 24 months.

The Chinese stock market, for a long time, was a no-go zone for global investors due to strict rules and a slow economy. However, now, in 2026, things have changed. Many investors from India are now looking at China again. The renewed interest is a consequence of Chinese stock prices being much lower than the US ones; at the same time, returns for the former are almost just as good. If you want to grow your money by betting on global giants like Alibaba or BYD, here is how you can do it safely from India.

Why Are Investors Looking at China Again?

The main reason for the fresh interest is the price gap. While US stocks have been hitting record highs, Chinese stocks are still quite cheap. In early 2026, the price-to-earnings ratio (which shows if a stock is expensive) for China is around 12x, compared to over 22x for US stocks. This means you are paying less for every dollar of profit these companies make.

Another big reason is variety. Most Indian investors only put money into US tech stocks. By adding Chinese stocks, you protect yourself if the US market takes a hit. China also leads the world in sectors like electric vehicles (EVs) and green energy. Investing there gives you a piece of these growing industries. Plus, since these investments are in US Dollars, you get a safety cushion if the Indian Rupee weakens over time.

Best Way to Invest for Indians: US-Listed Chinese ETFs

You cannot buy stocks directly on the Shanghai or Shenzhen exchanges from India easily. The best and safest way is to buy US-listed Chinese ETFs (Exchange-Traded Funds). An ETF is like a basket that holds many different stocks at once. Instead of picking one company and risking your money, you buy a small part of the whole Chinese market.

Some popular options include the iShares MSCI China ETF (MCHI), which tracks top firms in all sectors, or the KraneShares CSI China Internet ETF (KWEB), which focuses on tech giants. These ETFs trade on American stock exchanges just like regular stocks. This makes them easy to buy and sell through global investment apps.

Step-by-Step Guide to Start Investing

Indians can start investing in Chinese stocks by using their phones. Here is how:

Pick a Global Platform: Choose a reliable app like INDmoney, Groww, etc., that offers US stock investing. These apps help you open a US brokerage account in minutes.

Complete Your KYC: You will need to upload your PAN card and Aadhaar. Most apps use a quick selfie or video to verify who you are.

Fund Your Account: You can transfer money from your Indian bank account. Under the Liberalised Remittance Scheme (LRS), the Reserve Bank of India lets you send up to Rs. 22,623,862 (approximately $250,000) abroad every year for such investments.

Select Your ETF: Search for the China ETF you like. You don't need to buy a full share; many apps allow fractional investing, meaning you can start with as little as about Rs. 85-90 ($1).

Place Your Order: Enter the amount and click Buy. Since the US market opens in the evening (IST), you can manage your trades after your workday ends in India.

Also Read: Tesla or BYD: Which Stock to Invest in Right Now?

Tax Rules and Risks to Know

Before you jump in, you must know about taxes. If you hold your investment for more than 24 months, you pay a Long-Term Capital Gains (LTCG) tax of 12.5%. If you sell earlier, the profit is added to your regular income and taxed according to your tax slab. There is also a 25% tax on dividends in the US, but you can often claim this back in India using special tax forms.

While the rewards are good, there are risks. Tensions between the US and China can cause prices to swing. Also, the Chinese government sometimes changes rules for companies very quickly. Using an ETF helps lower the risk of one company failing, but you should still only invest money that you don't need for the short term.

Also Read: Best Small-Cap Stocks in India for 2026

Final Thoughts

Investing in Chinese stocks is about finding value in a market that has already been through a reset. For an Indian investor, China offers a way to step out of the US tech bubble and own a piece of the world's second-largest economy at a massive discount.

While the political risks are real, the move toward AI and EVs shows that China is still a global powerhouse. As long as you use the ETF route to stay diversified and keep a long-term view, Chinese stocks can be a strong addition to your global portfolio.

Note: All the US Dollar prices have been converted into Indian rupees using the Revolut currency converter. Please do your own research, as prices may vary.

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FAQs

1. Can Indians legally invest in Chinese stocks

Yes, Indians can legally invest in Chinese stocks, but not directly on Chinese exchanges. The easiest way is through US-listed ETFs that track Chinese companies. Under the Liberalised Remittance Scheme (LRS), you can send up to Rs. 22,623,862 (approximately $250,000) abroad each financial year. This makes global investing fully legal and regulated through Indian banks and approved platforms.

2. What is the safest way to invest in Chinese companies from India

The safest way is through US-listed Chinese ETFs like MCHI or KWEB. An ETF holds many stocks in one basket. This lowers the risk compared to buying a single company. If one stock falls, others may balance it out. ETFs are easy to buy through global investment apps and offer better diversification for beginners.

3. How much money do I need to start investing?

Many global apps allow fractional investing. This means you can invest even Rs. 85-90 (around $1). You can increase your investment over time. This makes it easy for small investors to enter global markets without taking big risks at the start.

4. What taxes do Indians pay on Chinese ETF investments?

If you hold your investment for more than 24 months, you pay 12.5% long-term capital gains tax. If you sell earlier, profits are taxed as per your income slab. Dividends are taxed at 25% in the US. However, you can claim credit for this tax in India while filing returns. Always keep records for smooth filing.

5. Should you invest in Chinese stocks now?

Chinese stocks look cheaper compared to US markets in 2026, which attracts many investors. They also offer exposure to EVs, green energy, and large tech firms. However, there are risks like policy changes and global tensions. So, long-term may make sense for investors who want global diversification. Do your own research before making any financial decisions and check your risk appetite.