NRI Investing in India: A Complete Guide to Options, Rules & Repatriation

For millions of Non-Resident Indians (NRIs), investing in India is more than just a financial move - it’s a bridge to home. Whether it's the emotional value of buying property in your hometown, the appeal of India’s high-growth potential, or the need to support family, India remains a strong contender in global portfolios.

What’s more, India offers unique benefits like:

• Currency arbitrage: NRIs earning in stronger currencies like USD, GBP, or AED get more rupees per dollar
• Tax optimisation: Some investment options offer lower tax rates or exemptions (like NRE FDs)
• Long-term growth: A booming middle class, expanding digital infrastructure, and steady GDP growth

But most NRIs are overwhelmed with questions:

• Can I invest from abroad legally?
• Will my investments be repatriable?
• What are my safest and most profitable options?
• Are mutual funds better than FDs or real estate?

This blog will guide you step-by-step through the how, why, and what of NRI investing - in simple, clear language.

Can NRIs Invest in India?

Yes. NRIs can legally invest in India across multiple asset classes including mutual funds, stocks, real estate, FDs, and more - as long as they follow FEMA (Foreign Exchange Management Act) and RBI guidelines.

Here’s what you need to know:

Who qualifies as an NRI?

• An Indian citizen who resides outside India for 182 days or more in a financial year
• Or someone who has moved abroad for employment, business, or other valid reasons
• OCI (Overseas Citizen of India) and PIO (Person of Indian Origin) cardholders are also eligible

What accounts are required?

To invest, NRIs must route their funds through specific types of bank accounts:

• NRE (Non-Resident External): Repatriable, tax-free interest, used for external income
• NRO (Non-Resident Ordinary): Non-repatriable beyond $1 million per FY, for Indian income
• FCNR (Foreign Currency Non-Resident): Time deposits in foreign currency, avoids currency risk

Investments are allowed only when money flows through these accounts and are subject to RBI tracking.

Repatriation - Can I bring the money back?

• Funds from NRE/FCNR accounts are fully repatriable (principal + returns)
• Funds from NRO accounts are partially repatriable (up to $1 million per FY with conditions)

Example: If you invest in mutual funds using NRE funds, both the capital and the gains can be brought back to your resident country - subject to RBI reporting and TDS rules.

How to Start Investing as an NRI: Step-by-Step

Setting up your investments in India as an NRI isn’t complicated but it’s not exactly plug-and-play either. Here's a simple, no-fluff walkthrough to get you started the right way.

Step 1: Open the Right NRI Bank Accounts

You’ll need at least one of the following:

Step 2: Complete KYC (Know Your Customer)

This is mandatory for mutual funds, stocks, and most formal investments in India.

Documents you’ll need:

• Passport (with visa stamp or overseas address proof)
• PAN Card
• Overseas address proof (utility bill or bank statement)
• NRI bank account details (NRE/NRO)
• Recent photograph
• KYC form or CKYC via online platforms (some mutual fund houses offer video KYC too)

Step 3: Choose a Platform or Intermediary

You can invest either:

• Directly with AMCs or mutual fund houses
• Through RBI-registered brokers and investment platforms that support NRI onboarding
• Via wealth management services like Finnovate, if you want personalised guidance

Step 4: Open a Demat + Trading Account (for Stocks)

If you wish to invest in Indian equities, ETFs, or IPOs, you’ll need:

• PIS-compliant Demat & Trading account (Portfolio Investment Scheme – regulated by RBI)
• Linked NRE/NRO account (depending on fund source)
• Setup via a SEBI-registered broker

Step 5: Understand Taxation Rules

NRIs are subject to TDS (Tax Deducted at Source) in India.

Here’s a quick view:

Step 6: Set Up a SIP or Lumpsum Investment

• Mutual funds allow SIPs from NRE/NRO accounts
• You can invest monthly or make lump sum entries based on your goal
• NRIs can even register for auto-debit SIPs from NRE/NRO bank accounts

Where Can NRIs Invest in India? (Options Breakdown)

India offers a wide range of regulated investment avenues for NRIs - whether you want long-term growth, income, or diversification.

Let’s break them down clearly:

1. Mutual Funds

Yes, NRIs can invest in Indian mutual funds.

• Allowed via NRE or NRO accounts
• SIP and lump sum both possible
• Some AMCs don’t accept investors from the US or Canada due to FATCA. Always check before applying.
• Popular choices are Equity Mutual Funds, Hybrid Funds and Debt Funds.

Use our SIP calculator to see how much you can accumulate over time

2. Indian Stock Market (via PIS Route)

NRIs can invest in Indian equities, ETFs, and IPOs through Portfolio Investment Scheme (PIS) accounts.

• Requires: Demat + Trading Account + NRE/NRO Bank Account
• No intraday trading allowed
• Can invest in listed equities and ETFs

3. Real Estate

A favorite among NRIs.

You can buy:

• Residential properties
• Commercial properties

You cannot buy:

• Agricultural land
• Farmhouses or plantation properties

Rental income and capital gains are taxable in India, but funds can be repatriated after paying due taxes.

4. Public Provident Fund (PPF) - Not Available to New NRIs

• If you opened a PPF before becoming an NRI, you can continue till maturity
• New PPF accounts can’t be opened by NRIs

Interest is tax-free, and maturity proceeds are non-taxable in India.

5. National Pension Scheme (NPS) – Allowed

• NRIs can open NPS accounts, provided:
• You hold a valid Indian passport

KYC is completed via NRE/NRO account

6. Fixed Deposits (FDs)

• NRE FDs: Tax-free, fully repatriable
• NRO FDs: Taxable, limited repatriation

You can open FDs via banks or use FCNR deposits to avoid currency risk.

Common Mistakes NRIs Make

• Using Resident Savings Account:
  NRIs must convert old resident accounts to NRE/NRO - using resident accounts post-migration is against FEMA rules.
• Ignoring Double Taxation Rules:
  Not considering DTAA can lead to tax liability in both countries. Always declare income correctly in both jurisdictions.
• Choosing Platforms That Don’t Support Your Country:
  Especially for US/Canada-based NRIs, many platforms reject investments due to FATCA restrictions.
• Falling for ULIPs or Real Estate Pitches:
  High-cost insurance plans and overpriced properties are commonly mis-sold. Prefer transparent, low-cost investments.
• Neglecting Portfolio Review:
  Investments left unattended may underperform. Do a yearly review and rebalance based on life goals and market changes. We suggest doing a yearly portfolio review aligned to your financial goals.
• No Nominee or POA Assigned:
  Lack of a nominee or Power of Attorney (POA) can delay access to funds during emergencies.

Want Help Planning Your NRI Portfolio?

We help NRIs across the globe build a structured, compliant, and growth-focused investment plan in India.

You can Book a free consult with a SEBI-registered advisor

Whether it’s your first investment or a portfolio overhaul - we’ve got your back.

Final Thoughts

India remains a powerful investment destination for NRIs - blending emotional connection with strong long-term potential. Whether you’re eyeing market-linked returns, wealth preservation, or retirement back home, the opportunity is real.

But remember:

• Investing as an NRI comes with unique rules and paperwork
• The platform, account type, and fund you choose can affect taxes and repatriation
• One wrong move (like using a resident account) can lead to penalties or legal trouble

With proper structure, the right advisors, and long-term discipline, NRIs can benefit from India’s growth - without compromising compliance or peace of mind.

FAQs

1. Can NRIs invest in mutual funds in India?

Yes. NRIs can invest in mutual funds via NRE or NRO accounts.

2. Can I invest in SIPs while staying abroad?

Yes. SIPs work well for NRIs - just ensure your investments are routed from an NRE/NRO account.

3. Can NRIs open a Demat account?

Absolutely. You'll need Demat + Trading account, NRE/NRO bank account and Portfolio Investment Scheme (PIS) letter (for some brokers).
You cannot do intraday trading as an NRI - only delivery-based.

4. Can NRIs invest in PPF or NPS?

PPF: Not allowed for new NRIs. Allowed till maturity if opened before migration.
NPS: Allowed for Indian citizens with valid passport and NRE/NRO KYC.

5. What are the tax rules for NRIs investing in India?

NRE FDs are tax-free; NRO FDs are taxable.
Capital gains on mutual funds and stocks are taxed in India, but you may claim benefits under DTAA.
Income from Indian real estate is also taxable.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. NRI investors should consult their respective investment and tax advisors and ensure compliance with both Indian and local laws before investing.