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Investment Options in India

As India warms up to the economic growth and prevailing real estate  boom, NRI Investment in India offers better-than-expected choices as well as opportunities to make high profits. A diversified domestic industrial base, banking infrastructure, and financial services, and real estate growth continue to add to its magnetic charm.

To attract foreign investment in India, Government is offering several facilities to Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Corporate Bodies (OCBs). While NRI refers to an Indian citizen who is residing outside India, PIO refers to an individual who at any time held an Indian passport or whose father or grandfather was a citizen of India.

According to the laws, NRIs/PIOs/OCBs/ are permitted to open bank accounts in India out of funds remitted from abroad. The foreign exchange brought in from abroad or out of funds is legitimately due to them in India, with authorized dealer.

The Reserve Bank of India (RBI) has granted general permission to NRIs/PIOs, for undertaking direct investments in Indian companies, under the Automatic Route purchase of shares under


Portfolio Investment Scheme,
2) Investment in companies and
3) Proprietorship/partnership concerns on non-repatriation basis
4) For remittances of current income.

NRIs/PIOs do not have to seek specific permission for approved activities under these schemes.

NRIs/PIOs/OCBs can avail Direct Investment Opportunities:

1) Automatic Route of RBI (With Repatriation Benefits): NRIs/OCBs can invest in shares/convertible debentures of Indian companies under the Automatic Route without obtaining Government or RBI permission except for a few sectors where FIPB/SIA permission is necessary, or where the investment can be made only up to a certain percentage of paid up capital.
2) Investment with Government Approval: Investments not eligible under the Automatic Route are considered by the Foreign Investment Promotion Board (FIPB) subject to sectoral limits/norms. These investments also enjoy full repatriation benefits.

Other Investments (with Repatriation Benefits):

  • Investment in Domestic Mutual Funds
  • Investment in Bonds Issued By Public Sector Undertakings
  • Purchase of Shares Of Public Sector Enterprises (By NRIs/PIOs/OCBs)
  • Deposits with Companies (For A Minimum Period Of Three Years)
  • Investment in Government Securities/Shares


Investment Upto 100% Equity (without Repatriation Benefits):

  • NRIs can invest by way of capital contribution in any proprietary or partnership concern in India provided the firm or the proprietary concern is not engaged in any agricultural/plantation activities or real estate business or Print Media on non-repatriation basis subject to the certain conditions.
  • NRIs/OCBs has been granted general permission to subscribe to:
    a) the shares/convertible debentures of an Indian company on non-repatriation basis,

b) to an Indian company to issue shares or convertible debentures by way of new/rights/bonus issue to NRIs/OCBs on non-repatriation basis provided that the investee company is not engaged in agricultural/plantation activities or real estate business (excluding real estate development i.e. development of property or construction of houses) or chit fund or is not a Nidhi company.

Other Investments (without Repatriation Benefits)

  • Investment in Non Convertible Debentures
  • Money Market Mutual Funds
  • Deposits With Companies
  • Commercial Papers (OCBs are presently not permitted)

Investment options in India
NRIs have been provided with multitude of investment options in India:

FCNR Accounts:
NRIs are permitted to open foreign currency (FCNR) account which can be opened in five major currencies, viz., US Dollar, Pound Sterling, Deutsche Mark, Euro and Japanese Yen. These accounts are opened for periods ranging from 12 months to 3 years. FCNR accounts may be opened with a remittance in the designated currency received from abroad or by conversion of a remittance in any other convertible foreign currency into the designated currency at the risk and cost of the customer. On maturity, payment shall be made in foreign currency/Indian Rupees, as desired by the depositor.

RFC Accounts:
NRIs are eligible to maintain Resident Foreign currency (RFC) accounts. These accounts can be held singly or jointly in the names of eligible persons. Such accounts can be maintained in the form of savings bank, current accounts and term deposits.

Term deposit accounts:
Term deposits can be opened by remittances from abroad or by transfer of funds from existing NRE/FCNR/NRO/NRSR accounts of the same person with other banks in India or from other branches of the bank or by tendering foreign currency notes/ travelers cheques brought by NRI's during their visit to India.

Non-resident Non-repatriable Rupee Deposit Scheme:
These accounts can be opened by way of transfer of funds from abroad or from existing NRE/FCNR accounts. Deposits period ranges from 6 months to 3 years and the deposits are maintained in Indian Rupees only on a non-repatriable basis.

Non-Repatriable Deposit Accounts (NRO):
The local funds of an NRI viz, rent, dividend, interest, sale proceeds of securities, property, etc. can be credited to these accounts and balances can also be placed in term deposits. Incomes earned on investments done on non-repatriable basis are to be credited to NRO account. After completion of formalities, eligible amount can be repatriated.

Special term deposit accounts:
These are reinvestment deposits. Interest earned on these deposits are added to the principal and compounded at quarterly intervals. The principal amount together with interest is repaid on maturity of the deposit.

Cash certificates:
All conditions pertaining to Special Term deposits are applicable for Cash Certificate Deposits.

Thrift Deposit Scheme:
It is a recurring deposit scheme where fixed sums are deposited every month for a fixed period. Compound interest is payable at the same rates as applicable to other term deposits. Loan facility is also available.

Unit Deposit:
It is a fixed deposit scheme wherein you can withdraw your deposit to the extent of your need and leave the remaining amount undisturbed to earn you interest at the contracted rate.

Apart from these NRIs are permitted to make direct investments in proprietary/partnership concerns in India as also in shares/debentures of Indian companies. They are also permitted to make portfolio investments i.e. purchase of shares/debentures of Indian companies through stock exchanges in India. These facilities are granted both on repatriation and non repatriation basis.

- NRI Investment in India
- Investment Options in India
- Return to India
- NRI Remittance
- NRI Repatriation
- NRI Services
- NRI Housing and Finance
- NRI Banking
- FDI in India
- FAQs on Banking
- FAQs on Legal Issues
- FAQs on Taxation
- FAQs on NRI Real Estate
- RBI Guidelines for NRIs
- Buying Immovable Property in India
- Home Loan FAQs
- Rental Trends in India
- FDI in Real Estate
- Retail Sector in India
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