Stock Market Today

The easiest way would be to invest in American Depositary Receipts (ADRs) of Indian companies traded in the U.S.; there are quite a few, including Infosys (NasdaqGS:INFY), Satyam (NYSE:SAY), Tata Motors (NYSE:TTM), and ICICI Bank (NYSE:IBN). This will provide you with some exposure to India.

If you want to go deeper, you will need to open an account with an Indian brokerage house and transact through them. Alternatively, you can open an account with someone like Auerbach Grayson (www.agco.com), which specializes in selling foreign securities to U.S. investors through partnerships with foreign brokers. Either will involve quite a bit of paperwork and will confuse the hell out of your tax accountant (most of those guys have never done a tax return involving foreign investments).

Speaking of tax returns, your broker (whether in the U.S. or in India) will automatically withhold Indian income taxes from dividends paid by the stocks you hold; you can get a tax credit for them in the U.S., if you know how to do the paperwork. Capital gains are taxed in the U.S. at usual rates, so there is nothing to pay in India and no additional complications in the U.S.