Investing in India as a non-resident — what you need to know

India is one of the few large economies still compounding nominal GDP at 10–12% a year, and for an NRI with rupee-denominated liabilities — parents, property, eventual return — having Indian assets is not really optional. The harder questions are which avenues a non-resident can legally use, what the post-tax, post-FX return actually looks like, and what plumbing (accounts, PAN, KYC, demat) needs to exist before any of it works.

This page is the overview. Each section links to the deep-dive already on this site.

The FEMA frame — the thing that gates everything

Every investment route open to a non-resident sits inside the Foreign Exchange Management Act (FEMA) and the RBI's Master Direction on Investment by NRIs / OCIs. Two distinctions matter more than any other:

Repatriable vs non-repatriable. Money funded from abroad (NRE / FCNR) generally produces repatriable investments — proceeds can leave India freely. Money funded from Indian-source income (NRO) produces non-repatriable investments — proceeds stay inside the USD 1 million per financial year NRO ceiling on outward remittance. Pick the funding route at the start; converting later costs you a year of your repatriation cap.
Permitted vs prohibited. NRIs and OCIs can buy almost any listed security and most residential / commercial property. They cannot buy agricultural land, plantation property or farmhouses, and cannot trade in commodity F&O or currency derivatives the way residents can. A handful of small-savings schemes (PPF for new accounts, NSC, Post Office MIS, Senior Citizen Savings Scheme, Sukanya Samriddhi) are also closed to non-residents.

For the FEMA forex framework end-to-end, see foreign exchange accounts. For the LRS rules that govern outward investing from India to abroad — relevant if you become resident again — see the liberalised remittance scheme.

The plumbing you need before you invest

You can't skip this layer. Almost every other question — "can I buy this mutual fund?", "why is 30% TDS landing on my interest?", "why won't this broker open an account?" — collapses to one of these missing pieces.

PAN card. Mandatory. Without PAN, Section 206AA strips DTAA relief and applies the higher of treaty rate or 20% TDS on most income. See PAN for NRIs.
NRE + NRO bank accounts at minimum. NRE for foreign-funded (repatriable) investing, NRO for Indian-source investing and rent / dividend collection. FCNR(B) optionally if you want to hold foreign currency. See which NRI bank account you actually need.
PIS approval letter from your bank if you'll buy listed shares on the secondary market through the Portfolio Investment Scheme. One PIS account per investor across all banks — the rule the RBI enforces strictly.
NRI demat account linked to PIS (for repatriable trading) and a separate non-PIS NRO demat (for IPO allotments, mutual funds, inherited shares, gifts and ESOPs). See transferring inherited shares for the gift / inheritance route.
FATCA / CRS self-declaration at every account opening. Indian financial institutions report NRI balances and income to your country of tax residence — see FATCA / FBAR comparison.
A Tax Residency Certificate (TRC) and Form 10F if you want to invoke a DTAA rate (typically on NRO interest, royalty, FTS or capital gains). Filed annually.

Without all six, you'll either get rejected at onboarding or lose 5–10% of returns to avoidable TDS.

The investment menu

Bank deposits — NRE FD, NRO FD, FCNR(B)

The default. Tax-free interest on NRE and FCNR(B), fully repatriable principal, no INR risk on FCNR. NRO interest is taxable at slab rates with 30% + surcharge + cess TDS at source (DTAA can bring this to 10–15% for most treaty countries if you file Form 10F + TRC). Rates as of April 2026 sit roughly 6.75–7.25% on NRE 1–3 year FDs and 4.5–5.25% on USD FCNR 1–5 year — the FCNR rate is tied to international benchmarks (SOFR + spread), not Indian repo. Best treated as the cash allocation, not the growth allocation.

Deep-dive: NRI bank accounts — NRE / NRO / FCNR explained.

Indian listed equities

Open to NRIs through the Portfolio Investment Scheme (PIS) on a repatriable (NRE-linked) or non-repatriable (NRO-linked) basis. Restrictions worth knowing:

Single-investor cap: 5% of paid-up capital per company.
Aggregate NRI cap: 10% of paid-up capital per company, extendable to 24% by special resolution.
No intraday trading, no short-selling. NRIs trade on a delivery-only basis — buy today, settle, then sell.
No equity F&O on NRE-PIS; non-PIS NRO accounts can do F&O within RBI's LRS-equivalent framework but most brokers restrict it.
Sectoral restrictions apply to defence, telecom, insurance, media, multi-brand retail and others — check the consolidated FDI policy before buying.
Capital gains TDS is deducted by the broker / AD bank at source — 12.5% LTCG on equity (above ₹1.25 lakh exempt) and 20% STCG on listed equity (post-2024 rationalisation).

Deep-dive: investing in the Indian stock markets.

Mutual funds

The cleaner equity route for most NRIs. No PIS account needed — fund houses accept NRE / NRO direct debit. Almost every AMC accepts NRI subscribers except US and Canada residents, where SEC / FINRA registration burdens have made roughly half the industry close the door. Workable AMCs for US/Canada residents include ICICI Prudential, SBI, Aditya Birla Sun Life, UTI, Nippon India and a few others — the list shifts year to year.

Equity funds: taxed like direct equity (12.5% LTCG above ₹1.25 lakh, 20% STCG).
Debt funds: post-April 2023, all gains are taxed at slab rates regardless of holding period — the indexation benefit is gone.
TDS at source on NRI mutual fund redemptions — 12.5% on LTCG equity, 20% on STCG equity, 30% on debt. DTAA can reduce this on debt for some treaty residents.
SIPs work from NRE / NRO, including in INR-denominated equity, hybrid, ELSS (tax-saver), index and international feeder funds.

Real estate

The traditional NRI allocation, and the one most worth questioning before increasing. NRIs and OCIs can freely buy residential and commercial property. They cannot buy agricultural land, plantation property or farmhouses (inheritance of these is allowed; purchase is not).

The hard parts are the structural ones the brochure won't show: gross rental yields of 2.0–3.5% in metros (vs 4.5–6% in most developed markets), 1% TDS for residents but 12.5–20% TDS for NRI sellers at the time of sale, FEMA-bound repatriation of sale proceeds inside the USD 1 million / FY NRO ceiling, and a rupee that has lost roughly 40% against the USD over the last decade. None of which makes property a bad investment — it makes the honest expected return considerably lower than the headline appreciation suggests.

Deep-dives: investing in Indian real estate — an honest framework, buying property in India, transferring sale proceeds out of India.

Government and corporate bonds

G-Secs and SDLs through the RBI's Fully Accessible Route (FAR) — open to NRIs, no quantitative limit, fully repatriable, interest taxable. The clean way to get rupee-sovereign exposure without rolling FDs.
Corporate bonds through the limit-based VRR / general routes; smaller secondary-market liquidity.
Tax-free PSU bonds (Section 10(15)(iv)(h)) — when on offer, interest is tax-free; capital gains on sale are taxable.
Sovereign Gold Bonds (SGB) — not open to non-residents for fresh subscription. Existing holdings (acquired while resident) can be held to maturity but cannot be added to.
RBI Floating Rate Savings Bonds (7.15% as of April 2026) — not open to NRIs.

NPS — National Pension System

Open to NRIs and OCIs aged 18–70 on Tier I. Funded from NRE / NRO. Equity allocation capped at 75% (Active Choice) or glidepath-based (Auto Choice). Withdrawals at 60: 60% lump sum tax-free, 40% mandatory annuity (annuity income is taxable). Useful for the rupee-pension layer of a return-to-India plan; less useful if you have no intention of returning, because the annuity exit forces you back into INR for life.

PMS and AIF — for the high-ticket investor

Portfolio Management Services (PMS): SEBI minimum investment is ₹50 lakh. Discretionary, non-discretionary and advisory variants. NRIs can invest from NRE (repatriable) or NRO (non-repatriable). Performance-fee structures vary widely; due-diligence cost is real.
Alternative Investment Funds (AIF): SEBI minimum is ₹1 crore. Categories I (start-ups, infra, social), II (private equity, debt funds, real estate funds) and III (hedge funds, long-short). Tax treatment depends on category — Cat I and II pass-through, Cat III taxed at the fund level.
GIFT City AIFs — set up under the IFSCA in Gujarat's GIFT City, often denominated in USD, with a meaningfully cleaner tax wrapper for non-residents (no Indian capital gains tax on most categories of foreign-currency AIFs). The newest and arguably the most interesting wrapper for a serious NRI allocation to India.

Gold

Physical gold and jewellery — freely owned; no FEMA bar.
Gold ETFs and gold mutual funds — open to NRIs, no restrictions; taxed as debt (slab-rate) post-April 2023.
Sovereign Gold Bonds — closed to fresh NRI subscription (see above).
Digital gold platforms (MMTC-PAMP, SafeGold, Augmont) — KYC-permitting, generally workable.

What's closed to NRIs

Worth being explicit on the list — the search results out there are still showing pre-2018 information.

PPF — no new accounts. Existing accounts opened while resident can run to maturity, but cannot be extended in five- year blocks beyond the original 15-year tenor.
NSC, Post Office MIS, KVP, Sukanya Samriddhi, Senior Citizen Savings Scheme — all closed to non-residents for new investment.
RBI Floating Rate Savings Bonds, Sovereign Gold Bonds (fresh) — closed.
Agricultural land, plantation, farmhouses — purchase prohibited; inheritance allowed.
Commodity derivatives, currency derivatives — restricted on the resident exchanges; available via GIFT-City INX with separate onboarding.

The two returns the brochure won't show you

Tax drag. A 12% nominal pre-tax INR return on an Indian debt MF lands at roughly 8.4% for a 30%-bracket NRI after tax — and that's before surcharge and cess. On NRO interest, the gap between the headline 7% FD rate and the post-TDS 4.9% is the entire equity-vs-debt premium most retail investors think they're earning.

FX drag. The INR has depreciated against the USD at roughly 3.0–3.5% CAGR over the last decade, and against GBP, EUR and CAD at slower but still meaningful rates. A 12% INR return becomes roughly 8.5–9% in USD before tax. This is not a reason to avoid Indian assets — it is a reason to (a) hold them in repatriable buckets so currency conversion timing is yours to control, and (b) stop comparing the headline INR return to your home-currency benchmark without the haircut.

For the full tax map, see NRI taxation in India and DTAA — how it works.

A defensible default allocation for an NRI

There is no single right answer, but a workable starting point for an NRI who has already covered the home-country emergency fund and tax-advantaged accounts:

Bucket	Vehicle	Funded from	Why
Cash / short-term INR liabilities	NRE FD or liquid mutual fund	NRE	Tax-free, repatriable, covers parents / property / travel
FX-hedged cash	FCNR(B) FD	Foreign currency	Removes INR risk on the cash layer
Indian equity	Index / large-cap mutual fund + 1–2 active funds	NRE	Diversified, no PIS / brokerage friction, tax handled by AMC
Indian fixed-income	G-Sec via FAR or short-duration debt fund	NRE	Sovereign rupee exposure without FD rolling
Real estate	Existing inherited / purchased — limit new exposure	n/a	Don't add unless yield + appreciation can clear the FX hurdle
Retirement	NPS Tier I, if returning to India	NRE / NRO	Rupee pension layer; skip if not returning
Long-tail growth	GIFT-City AIF / international PMS	NRE / foreign	High-ticket, cleaner wrapper

The exact weights depend on your liability map (how rupee- denominated is your future?), your tax residence (US vs UK vs Gulf changes everything via DTAA and PFIC rules), and your return-to-India timeline.

Common mistakes that cost real money

Funding investments from NRO when NRE was available — permanently strands the proceeds in the USD 1 million / FY cap.
Forgetting to update your bank that you've become NRI — the resident savings account keeps running, mutual fund folios stay flagged "resident", and on sale or redemption the AMC suddenly asks for KYC re-verification while withholding proceeds.
Buying Sovereign Gold Bonds or PPF after becoming NRI — schemes are closed; subscriptions get reversed and intervening returns lost.
Skipping Form 10F / TRC — DTAA relief on NRO interest blocked, full 30%+ TDS lands. Form 10F is now mandatory online via the Income Tax e-filing portal; paper filings are no longer accepted.
Treating Indian mutual funds as PFICs are treated (US residents specifically) — PFIC reporting on Form 8621 is required for non-US-domiciled funds; mark-to-market or QEF elections need to be set up properly. This is a CPA conversation, not a Reddit one.
Holding listed shares across two demat accounts (PIS and non-PIS) without keeping the cost-basis split clean — capital gains computation later becomes a mess.
Buying agricultural land via a relative as a "workaround" — FEMA violation; the property cannot be repatriated, sold to another non-resident, or kept on the books cleanly when you return.

Starting checklist

Confirm your residential status under FEMA (different from the income-tax residential status) — see residential status for tax purposes.
Get a PAN if you don't have one — see PAN for NRIs.
Open NRE + NRO at one bank; add FCNR if holding foreign currency. See which NRI bank account.
Apply for PIS if you intend to buy individual listed shares; otherwise skip and go directly to mutual funds.
Open NRI demat + trading linked to NRE (PIS) and a non-PIS NRO demat for IPOs / inheritance / gifts.
File FATCA / CRS self-declaration at every account opening.
Get TRC + Form 10F filed annually if invoking DTAA on NRO income.
Review your portfolio's INR weighting against your INR liabilities — not against your home-currency portfolio.
Talk to a CPA in your country of residence about how Indian capital gains, dividends and interest are reported there. The Indian side is the easy half.

Summary

FEMA decides what's open; tax decides what's worth it; FX decides what actually compounds.
Bank accounts first, then PAN, then demat. Skipping this order costs you weeks and avoidable TDS.
Mutual funds are the cleanest equity route for most NRIs; direct stocks need the PIS plumbing.
Real estate is a real allocation, not a default allocation — the post-tax, post-FX number rarely beats the brochure.
Repatriable (NRE-funded) > non-repatriable (NRO-funded) whenever you have the choice.
PPF, SGB, RBI Floating Rate Bonds and small-savings schemes are closed to fresh NRI investment — pre-2017 search results still get this wrong.
GIFT City is the most interesting newer wrapper for serious NRI allocations to India.

For the deep-dives, see investing in Indian stocks, investing in Indian real estate, NRI bank accounts, NRI taxation in India, DTAA, and PAN for NRIs. For the account-and-tax plumbing on returns and repatriation, see transferring funds from India and TDS on NRI income.