Short answer: NRIs can invest in India through bank deposits (NRE/NRO/FCNR), Indian equities and ETFs (via PIS/non-PIS + demat), mutual funds, IPOs (ASBA), Government securities (RBI Retail Direct), corporate bonds/NCDs, real estate (with restrictions), and retirement products like NPS. Repatriation and tax treatment depend on account type and FEMA rules. (Reserve Bank of India, AMFI India)
Last updated: 15 August 2025
Why this matters
Whether you plan to return to India or build a globally diversified portfolio from abroad, understanding where NRIs can invest, what is repatriable, and how taxes/TDS apply helps you align returns with real-life cash-flow needs (education, a home purchase, retirement).
The building blocks: NRE, NRO, FCNR (B)
- NRE (Non-Resident External) Account/FDs: INR account funded from overseas; principal + interest fully repatriable; interest generally exempt from Indian income tax. Suitable for parking foreign income in INR. (Reserve Bank of India)
- NRO (Non-Resident Ordinary) Account/FDs: For Indian-source income (rent/dividends). Repatriation capped at USD 1 million per FY (after taxes and documentation). Interest is taxable in India. (Reserve Bank of India)
- FCNR (B) Deposits: Foreign-currency fixed deposits with Indian banks; repatriable; hedge INR depreciation risk. (Reserve Bank of India)
Quick setup flow: Choose account (NRE/NRO/FCNR) → Decide repatriability → Complete KYC/FATCA → Pick investment vehicle → Track TDS + DTAA relief where applicable. (AMFI India)
Option 1: Indian Equities & ETFs
Routes & limits
- Secondary market (listed shares/ETFs): NRIs invest via Portfolio Investment Scheme (PIS) through a designated bank (repatriable via NRE-PIS or non-repatriable via NRO). Per-company limit: 5% of paid-up capital for an individual NRI (aggregate ceilings also apply). (Reserve Bank of India, NSE India)
- Open NRI trading + demat; link the appropriate NRE-PIS or NRO (non-PIS) account as per your repatriation need. (Brokers/banks provide PIS/non-PIS workflows.) (ICICI Bank)
What to expect
- Dividends credit to your linked bank account; capital gains tax (and TDS for NRIs) apply per security type/holding period; check DTAA for relief.
- Use ETFs (e.g., Nifty 50, sectoral) for low-cost exposure.
Option 2: Mutual Funds (Equity, Hybrid, Debt, Gold funds)
- Yes, NRIs can invest in Indian mutual funds, subject to KYC and FATCA/CRS compliance. Some AMCs impose country-specific restrictions (notably for US/Canada-based NRIs)—always check the Scheme Information Document or AMC policies. (AMFI India, Bajaj Finserv Asset Management Ltd)
- Invest on a repatriable basis via NRE (where permitted by the AMC) or non-repatriable via NRO. TDS applies to NRI redemptions; actual liability depends on fund category and holding period. (AMFI India)
Pro tip: For long-horizon goals, compare CAGR across categories:
CAGR=(Ending ValueBeginning Value)1n−1\text{CAGR} = \left(\frac{\text{Ending Value}}{\text{Beginning Value}}\right)^{\tfrac{1}{n}} – 1
Option 3: IPOs (Primary Market)
- NRIs can apply to IPOs/rights issues via ASBA through their bank; allotments credit to your NRI demat. Use NRE for full repatriability; NRO is subject to USD 1 million annual limit. (ICICI Bank, Reserve Bank of India)
Option 4: Government Securities (T-Bills, G-Secs, SDLs)
- RBI Retail Direct allows non-resident retail investors eligible under FEMA to open an RDG (Retail Direct Gilt) account and buy G-Secs/T-Bills/SDLs directly with RBI. No brokerage/maintenance fees. (Reserve Bank of India, rbiretaildirect.org.in)
Why consider: Transparent pricing, sovereign risk, and potential to align fixed-income duration with your USD/INR views.
Option 5: Corporate Bonds & NCDs
- NRIs can subscribe (subject to offer terms) via demat; coupon payouts and redemptions follow account repatriability. If you prefer a direct route to sovereign paper, consider RBI Retail Direct as above. (Zerodha Support)
Option 6: Gold—What’s allowed (and what’s not)
- Sovereign Gold Bonds (SGBs): New subscriptions are for residents only. If you bought SGBs as a resident and later became an NRI, you may continue to hold till maturity/early redemption. NRIs cannot newly invest. (Reserve Bank of India)
- Alternatives for NRIs: Gold ETFs or fund-of-funds via demat/MF route. (Check AMC/broker eligibility.) (AMFI India)
Option 7: Real Estate in India
- NRIs can buy residential/commercial property freely. Agricultural land/plantation/farmhouse—purchase is not permitted (inheritance is allowed). Rental income credits to NRO; principal + gains repatriable within FEMA limits post tax. (MEA India)
Option 8: National Pension System (NPS)
- Under the All-Citizen Model, Indian citizens including NRIs and OCIs (18–70) can open NPS accounts (Tier I mandatory; Tier II optional), subject to KYC. Useful for goal-based INR retirement allocation with tax features (if taxable in India). (National Pension System Trust, PFRDA PROD)
Snapshot: Which route fits your need?
| Investment | Best for | Account needed | Repatriability | Compliance notes |
|---|---|---|---|---|
| NRE FD / FCNR(B) | Low-risk income, FX hedge | NRE/FCNR | Fully repatriable | RBI KYC |
| Equity/ETFs | Growth | NRE-PIS or NRO (non-PIS) + demat | NRE: full; NRO: capped | PIS limits apply; broker processes (Reserve Bank of India) |
| Mutual Funds | Diversified growth/income | NRE/NRO | As per funding account | KYC + FATCA; AMC country rules (AMFI India) |
| IPOs (ASBA) | New listings | Bank ASBA + NRI demat | Depends on NRE/NRO | Standard ASBA flow (ICICI Bank) |
| G-Secs/T-Bills | Sovereign fixed income | RBI Retail Direct (RDG) | As per bank funding | FEMA-eligible NRIs allowed (Reserve Bank of India) |
| Corporate Bonds/NCDs | Higher yield | NRE/NRO + demat | As per funding account | Offer-specific eligibility |
| Real Estate | INR rental/yield | NRO for rents | $1 mn FY cap | No purchase of agri/plantation/farmhouse (Reserve Bank of India, MEA India) |
| SGBs | Gold with coupon | — | — | NRIs cannot newly subscribe; legacy holding allowed (Reserve Bank of India) |
| NPS | Retirement | NRE/NRO + PAN | Withdrawals per PFRDA | NRIs/OCIs eligible 18–70 (PFRDA PROD) |
Repatriation & TDS—what NRIs must remember
- NRO repatriation: Up to USD 1 million per financial year (April–March) after paying applicable taxes and filing documentation through an AD bank. (Reserve Bank of India)
- TDS applies on many NRI receipts (MF redemptions, bank interest, rent). Your DTAA may lower effective tax—coordinate with your CA to file returns and claim credit in your country of residence.
Risk & suitability checklist (10-second scan)
- Match goal horizon to product risk (e.g., equity for 5Y+, G-Secs/NRE FDs for short-to-medium).
- Decide repatriable vs non-repatriable before funding.
- Confirm country-of-residence restrictions (US/Canada) with the specific AMC/broker. (AMFI India)
- Keep KYC/FATCA updated after passport/address changes. (AMFI India)
Mini case study (India–US NRI)
Profile: 38-year-old NRI in the US, INR goals in 8–15 years.
Construct:
- Core (60%): Nifty/Next 50/Active equity MFs (via NRO if AMC restrictions on NRE/US address).
- Stability (25%): RBI Retail Direct ladder of 1Y T-Bills + 5–10Y G-Secs to meet INR liabilities. (Reserve Bank of India)
- Cash/FX (15%): FCNR(B) USD deposit as a currency hedge. (Reserve Bank of India)
Rebalance annually; compute rolling CAGR for progress.
FAQs
Can US/Canada-based NRIs invest in Indian mutual funds?
Yes—several AMCs permit it with additional FATCA documentation. Check each AMC’s policy and KYC list. (AMFI India)
Can NRIs buy agricultural land in India?
No. Purchase of agricultural/plantation/farmhouse property is not permitted; inheritance is allowed. (MEA India)
Are NRIs eligible for SGBs?
New subscriptions: No. If you became NRI after buying as a resident, you can continue to hold. (Reserve Bank of India)
Can NRIs open NPS?
Yes. Indian citizens, resident or non-resident, and OCIs aged 18–70 are eligible under the All-Citizen Model. (PFRDA PROD)
Sources
RBI FAQs on NRE/NRO/FCNR(B) accounts and NRO repatriation; PIS limits for NRIs; SGB eligibility; Retail Direct eligibility; AMFI on NRI MF investing/FATCA; MEA on property restrictions; NPS Trust eligibility. (Reserve Bank of India, NSE India, AMFI India, MEA India, National Pension System Trust)Disclaimer: Regulations and tax rules change. Use this guide as orientation and consult your advisor/CA for personalised, up-to-date tax and FEMA compliance.