Being an NRI has its ups and downs when it comes to investment options in India. Being an NRI, many investment options come under the purview of FEMA due to the investments being subject to foreign exchange rules and regulations.
PIOs and NRIs have seen a sudden boom of investment opportunities in India with the government simplifying the elaborate procedures that were the norm in order to encourage and facilitate an increase in investment from NRIs. The investments can be done by NRIs through 2 routes which are with government approval and without. Below are the most popular investment opportunities for NRIs
Investment in shares and debentures of companies: In this type of investment, an NRI can purchase shares and non-convertible debentures in Indian companies through the portfolio investment scheme (PIS) offered by RBI. The investments however have to be carried out in accordance with the FEMA regulations and can be done with the existing PAN card.
Investment in mutual funds is yet another popular choice that also needs to be done in accordance with FEMA guidelines. The mutual funds can only be purchased through an NRI account or through inward remittance. If the benefits include repatriation, the investment period should last at least 3 years
Investment in Bank fixed deposits are another viable investment opportunity for NRIs. This investment can only be done through foreign currency non-resident bank accounts and repatriation benefits kick in only for investments that have completed at least 3 years. The account is maintained in foreign currency such as Dollars, Pounds Sterling etc.
Land is also something NRI’s can invest but this comes with its own clauses. NRI’s can invest in commercial or residential land but cannot own or invest in agricultural land or own any plantations. Post office schemes can also be invested in indirectly. The NRI has to open a joint account with a resident India to be eligible to invest in Post Office Schemes.
Investments in Bonds and government securities can be carried out freely by NRIs but repatriation benefits are applicable only to those investments made through NRE or FCNR accounts and that have completed a minimum period of 3 years. Investments made through NRO accounts will have benefits of maturity credited to these accounts and cannot be repatriated. NRIs can also make direct investments in proprietary and partnership firms but the income generated through such investments cannot be repatriated.