Shares of Donald Trump’s media company Tesla and US-focused small-cap companies are on the rise, reflecting the optimism surrounding Donald Trump’s showing in the US Presidential election.

Although key states have not yet finalized their results, Trump declared victory after Fox News predicted he would win against Democrat Kamala Harris.

Trump Media & Technology Group, the former president’s media company, has tripled in value since its September lows, soaring 30% and pushing Trump’s stake to $5 billion.

Tesla, whose CEO Elon Musk has vocally supported Trump, rose 11%. Musk is also being considered for a major role in government; Trump promises to name himself head of the government efficiency commission if re-elected.

In response to the election results and Trump’s pro-domestic policies, S&P 500 futures hit an all-time high and Russell 2000 futures, which focus on small-cap U.S. companies, rose 5.6%.

Investors believe domestic companies will benefit from policies that support U.S.-based manufacturing and incentives for American businesses.

Indian investors interested in US stocks like Tesla or Trump Media can buy shares from US stock exchanges by following certain procedures under the Liberalized Remittance Scheme (LRS).

1. LRS Route Requirements:
Under the LRS, resident Indians can remit up to $250,000 per person annually for capital and current account transactions. Investors must comply with certain rules, including tax compliance and documentation regarding remittance sources.

2. Tax Effects:
Investing in U.S. stocks involves two tax components. Firstly, 20% Tax Collected at Source (TCS) is applicable if the remittance exceeds Rs 7 lakh per annum. Second, gains from U.S. stocks are classified as capital gains and require a 24-month holding period for long-term status. While short-term gains are taxed at individual rates, long-term gains are taxed at 20% with indexation benefits.

3. Creating a Brokerage Account:
Investing in US stocks requires opening an account with a brokerage firm that offers access to US markets. Local brokerage accounts generally do not allow outside trading, so investors need to consider fees that can be significant for smaller transactions.

This election-related market rally presents a unique opportunity for Indian investors to diversify into high-growth US stocks while meeting regulatory and financial requirements.