You can invest in the S&P 500 from India in three ways: an Indian S&P 500 index fund in rupees, a US-listed ETF like VOO, or an Ireland-domiciled UCITS ETF like CSPX. For most long-term investors, the UCITS route costs less than the Indian fund and avoids the US estate tax that comes with VOO.
The S&P 500 tracks the 500 largest companies listed in the US, including Apple, Microsoft, Nvidia and Amazon. Each route gives you the same index. What changes is how you invest, what you pay each year, how you are taxed and what happens to your investment when you die.
This guide compares the three routes side by side, explains who each one suits, and shows how to get started.
Table of contents
- The three routes at a glance
- Route 1: Indian S&P 500 index fund
- Route 2: US-listed ETFs like VOO
- Route 3: Irish UCITS ETFs like CSPX
- What about GIFT City?
- How to start on Paasa
The three routes at a glance
| Indian S&P 500 index fund | US-listed ETF (VOO) | Irish UCITS ETF (CSPX, VUAA, SPYL) | |
|---|---|---|---|
| How you invest | In rupees, through any Indian mutual fund app | In dollars, through a global broker, under LRS | In dollars, pounds or euros, through a global broker, under LRS |
| Can you invest today? | Limited. New SIPs closed since December 2024 | Yes | Yes |
| Yearly cost (TER) | 0.65% (direct plan) | 0.03% | 0.03% to 0.07% |
| Dividends | Reinvested inside the fund | Paid to you, with 25% US tax withheld | Reinvested inside the fund, with 15% US tax withheld at fund level |
| Tax on gains in India | 12.5% after more than 24 months, slab rate before | 12.5% after more than 24 months, slab rate before | 12.5% after more than 24 months, slab rate before |
| US estate tax | No | Yes, above $60,000 of US assets | No |
| TCS on remittance | No | 20% above ₹10 lakh a financial year, adjustable against your tax | 20% above ₹10 lakh a financial year, adjustable against your tax |
The Indian fund is the simplest to start with, if it is open. The two LRS routes cost less each year. Between them, the UCITS route avoids US estate tax and pays less tax on dividends.
Route 1: Indian S&P 500 index fund
An Indian mutual fund collects rupees from investors and buys the S&P 500 stocks on your behalf. The main fund tracking the full index is the Motilal Oswal S&P 500 Index Fund. You invest through any mutual fund app, with no LRS paperwork and no TCS.
The catch is access. SEBI caps how much Indian mutual funds can invest abroad. When the cap is reached, funds stop taking new money. The Motilal Oswal fund has discontinued new SIP registrations since 10 December 2024, and lump-sum investments have been suspended or capped at various points since 2022. Check the fund's current status before planning around it.
It also costs more. The direct plan charges 0.65% a year, against 0.03% to 0.07% for the ETFs below.
Suits you if you want to stay in rupees, invest small amounts and the fund is accepting money.
Note: If you bought units between 1 April 2023 and 31 March 2025, check with your tax adviser how your gains are taxed. The rules for international funds changed in that period.
For a full comparison of this fund with UCITS ETFs, see Motilal Oswal S&P 500 Index Fund vs UCITS ETF.
Route 2: US-listed ETFs like VOO
Yes, you can buy VOO from India. You send money abroad under the Liberalised Remittance Scheme, which allows up to $250,000 per financial year, and buy the ETF through a global broker. The same applies to the other big S&P 500 ETFs, such as IVV and SPY.
VOO is the cheapest S&P 500 fund available, at 0.03% a year. The drawbacks are tax:
- US estate tax. VOO is a US-domiciled fund, so it counts as a US asset. If your US assets are worth more than $60,000 when you die, your heirs may owe US estate tax at rates of up to 40%. See How the US Estate Tax Works for Indians.
- Higher dividend tax. The US withholds 25% of the dividends VOO pays you. You can claim this as a credit against your Indian tax, but the dividend is also taxed in India at your slab rate each year.
Suits you if you are investing small amounts that will stay well under $60,000 of US assets.
For the UCITS funds that track the same index, see Top UCITS Alternatives to VOO.
Route 3: Irish UCITS ETFs like CSPX
UCITS ETFs are European-regulated funds, and most are domiciled in Ireland. The ones tracking the S&P 500 hold the same stocks as VOO, but because the fund itself is Irish, it is not a US asset.
The three largest accumulating S&P 500 UCITS ETFs are:
| Fund | Ticker (LSE, USD) | TER |
|---|---|---|
| iShares Core S&P 500 UCITS ETF (Acc) | CSPX | 0.07% |
| Vanguard S&P 500 UCITS ETF (USD) Accumulating | VUAA | 0.07% |
| State Street SPDR S&P 500 UCITS ETF (Acc) | SPYL | 0.03% |
These tickers are the USD lines on the London Stock Exchange. The same funds also trade in pounds and euros under other tickers. You invest through LRS, as with VOO. The differences are:
- No US estate tax. Irish funds are not US assets, however much you hold.
- Lower dividend tax. The fund pays 15% US tax on the dividends it receives, under the US-Ireland tax treaty, and reinvests the rest. You have no dividend income to report each year. See How the 15% US Dividend Withholding Tax Works for Irish UCITS ETFs.
The cost is slightly higher than VOO for CSPX and VUAA, and the same for SPYL.
Suits you if you are investing for the long term, or your US assets are already above, or likely to cross, $60,000.
To choose between these funds, see CSPX vs VUAA and CSPX vs SPYL.
What about GIFT City?
You can also buy receipts linked to some US stocks through GIFT City in Gujarat. It still runs through LRS, the product range is narrower, and receipts linked to US stocks still carry US estate tax exposure, because the wrapper does not change what you finally own.
How to start on Paasa
Paasa gives you access to both LRS routes, VOO and the UCITS ETFs, in one account in your own name, with Interactive Brokers as custodian.
- Open your Paasa account and complete KYC online.
- Send money under LRS from your Indian bank account. See LRS for Global Investments.
- Buy the fund. Search by the fund's ISIN to be sure you are buying the right share class. See How to Buy UCITS ETFs from India.
- Report it in your ITR. Foreign holdings go in Schedule FA each year. See the Schedule FA Guide.
About Paasa
Paasa is a global investing platform for Indian residents and NRIs.
- Every S&P 500 route abroad: Buy VOO, CSPX, VUAA, SPYL and other ETFs on US and European exchanges, in USD, GBP or EUR.
- An account in your own name: Your holdings sit in an account in your name, with Interactive Brokers as custodian.
- Tax reporting support: Get the details you need for your capital gains schedule and Schedule FA when you file your ITR.
