NRI Investment Options in India
Beyond bank deposits, NRIs today have a fairly broad menu of investment avenues, each with its own account requirements, repatriation rules, and tax treatment:
- Equities and the Portfolio Investment Scheme (PIS/PINS): NRIs can invest directly in listed Indian shares on a delivery basis (no intraday trading), through a PIS account linked to an NRE or NRO bank account and a demat/trading account. RBI has simplified this route — a separate NRO-linked PIS account is often no longer required, with the NRE-PIS account alone sufficing. As of RBI’s June 2026 reform, the individual NRI investment limit in a single listed company was raised from 5% to 10% of paid-up capital, and the aggregate ceiling for all overseas individual investors was raised from 10% to 24% — and the route was also extended beyond NRIs/OCIs to all persons resident outside India. IPO subscriptions can be made through an NRE/NRO account without a dedicated PIS account.
- Mutual funds: NRIs and OCIs can invest in nearly all SEBI-regulated categories — equity, debt, hybrid, index funds, ELSS — through an NRE or NRO account, subject to KYC and FATCA/CRS compliance; a demat account is generally not required. Some AMCs continue to restrict or limit access for US/Canada-based NRIs due to the added SEC/FATCA reporting burden, so check a fund house’s policy before investing.
- Fixed deposits: NRE and FCNR fixed deposits remain a low-risk, tax-free-interest option, with NRE deposits fully repatriable; NRO deposits are for India-sourced income and carry the standard USD 1 million/year repatriation cap.
- Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs): for higher-ticket investors — PMS typically requires a minimum investment of around ₹50 lakh — offering professionally managed exposure including private equity, venture capital, and real-estate-linked strategies.
- Government securities, bonds and NPS: NRIs can invest in government securities, PSU/capital bonds, secure corporate bonds/NCDs, and the National Pension System (with some restrictions for OCIs). Fresh investment in Sovereign Gold Bonds is not permitted for NRIs, though SGBs bought while resident can be held to maturity or redeemed early; note the capital-gains exemption for SGBs bought on the secondary market no longer applies from 1 April 2026.
- What remains off-limits: small savings schemes and fresh PPF investment (an existing PPF account opened while resident can typically run to maturity but not be renewed); currency derivatives, commodities, and intraday equity trading. F&O trading is permitted only through the NRO account, non-repatriable, within SEBI limits.
Real Estate as an NRI Investment
Real estate remains one of the most popular NRI investment categories — a tangible asset in India with potential rental income and appreciation. NRIs can invest freely in residential and commercial property without prior RBI approval, with no cap on the number of properties. As elsewhere on this site: agricultural land, plantation property, and farmhouses remain off-limits for direct purchase, and all payments must be routed through proper banking channels, with cash strictly prohibited.
- Financing: NRIs can avail home loans from Indian banks, generally up to 75-85% of the property’s value, subject to income and eligibility documentation.
- Newer, more liquid routes: REITs (Real Estate Investment Trusts) and fractional real-estate platforms offer lower-ticket, more liquid exposure for NRIs who don’t want the illiquidity of owning and managing physical property from abroad.
- Capital gains on sale: since the Finance (No. 2) Act, 2024, long-term capital gains (held over 24 months) are taxed at 12.5% without indexation; the buyer must deduct TDS before paying an NRI seller, who can apply in advance for a lower/nil-TDS certificate where the actual liability is lower.
- Practical caution: managing property from abroad — documentation, tenants, repairs, resale — remains one of the most commonly cited difficulties for NRI real-estate investors, which is why a trusted Power of Attorney holder or professional property-management service is often recommended for NRIs who won’t be regularly present in India.