Investment Options for NRIs in India

Investment Options for NRIs in India

The Indian economy has been on a continuous growth curve. This is providing the non-resident Indians (NRIs) to explore multiple options to invest their funds in their home country. The returns from India are considerably higher than those from the US or European countries.

Some of the investment optionsavailable to NRIs in India are:

Investment in the Indian equities markets, including IPOs
Investment in mutual funds
Company fixed deposits and non-convertible debentures of companies
Real estate investments
Government securities
National Savings Certificates issued by post offices in India
Deposits in Indian banks

Both NRIs and PIOs are offered several facilities by the Government of India. NRIs are Indian citizen who resides outside India, while PIO (Person of Indian Origin) refers to an individual who at any time held an Indian passport, or any of whose parents or grandparents was a citizen of India. While NRIs are allowed to invest in all sectors when Indian citizens are allowed, PIOs are allowed to invest only in non-agricultural sectors. A ’24% Scheme’ allows Indian companies, except those engaged in agricultural activities, to issue up to 24% of their shares and debentures to NRIs with repatriation benefits.

The following is the list of foreign Investments which can give good returns and provide protection against inflation:

Mutual funds
Mutual funds have in its fold a number of innovative products nowadays, opening up innumerable choices for investors. The investor now has the option to choose a mutual fund that meets his risk acceptance and his risk capacity levels.

Direct Equity
As in other parts of the world, in India too stocks have outperformed every other asset class in a longer run.

Company Shares/Debentures
Direct investment can be made by NRIs in proprietary/partnership concerns in India as also in shares/debentures of Indian companies.

Portfolio investments i.e. purchase of shares/debentures of Indian companies through stock exchange/s in India are also permitted. These facilities are granted both on repatriation and non-repatriation basis.

Government Securities/Mutual Funds/ National Savings Certificates in India
NRIs are permitted to invest their funds in Government securities, Indian mutual funds and certain other investments such as the National Savings Certificate (NSC). Investments in NSC can be made by NRIs subject to certain terms and conditions. However, NRIs are not permitted to invest in bearer securities like Kisan Vikas Patra, Public Provident Fund (PPF) etc.

The maturity proceeds of such investments can be repatriated if they are purchased out of funds remitted from abroad or out of NRE/FCNR accounts. However, the maturity proceeds of investments purchased out of funds in NRO accounts can only be credited to NRO accounts and cannot be repatriated abroad.

Immovable Property
Reserve Bank of India has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain any prior permission of Reserve Bank. Further, the Reserve Bank has granted general permission for sale of such property without its permission.

Harjeet is an Indian – born mass-market novelist, who covers the world internet related topics . He writes columns and articles for various websites and internet journals in the domain of Investment options and Investment opportunities.

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