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NRI Investments

India offers attractive investment opportunities to NRIs. Real Estate Sector, Portfolio Investments, Debt and Debt Securities, Deposits with Banks are the major investment opportunities that are available to NRIs. NRI investment options in India are briefly explained hereunder

Real Estate

Indian Real Estate investment is only open to NRIs and not to foreign nationals or foreign companies. NRIs can make investment in Residential or Commercial property. NRIs however cannot invest in properties of Agricultural, Plantation or Farm house nature.

Repatriation facility in case of commercial and residential property is available upto two properties, that too for the amount of investment and not for appreciation. However, appreciation from two such properties can be repatriated under USD 1 Million scheme (known as Remittance of assets, Scheme). Also point to note is that there is no restriction on number of properties in which NRI can make investment. But, intention should be to invest in properties and not to trade.

NRI investment in Real Estate could fetch handsome returns, considering that India’s vast population base and growing demand for urbanisation. There are many Tier-II and Tier-III cities, which have offered descent rental yields coupled with price appreciation.

Portfolio Investment

Indian stock market are open for investment by NRIs on Repatriable basis as well as on Non Repatriable basis. Listed securities be it equity shares, equity linked instruments or debt securities, NRIs can make invest in each of these securities. Dividend and interest on securities is also eligible for repatriation.

Deposits with Banks

NRIs can place deposits with Indian banks in the form of NRO/NRE/FCNR.

NRO (Non Resident Ordinary) deposits represent Non Repatriable investment and since interest gets credited to the same account, it also bears the Non Repatriable character. However, NRI can avail USD 1 Million scheme to repatriate funds from NRO Account.

NRE (Non Resident External) deposits is available as Repatriable Investment. It also carries an attraction of being tax exempt and hence interest on NRE Account not liable to withholding tax / tax deduction. Funds can be transferred from NRO Account to NRE Account by complying with certain procedures prescribed under Indian Income Tax Act.

FCNR Deposit is also available as Repatriable Investment and it also offers tax exempt interest.

Other Investment Opportunities

Loans to partnership firms and proprietorship concern

NRIs can lend funds to proprietorship concern and partnership firms on non repatriable basis. The funds so borrowed by Indian firms and proprietorship concern, cannot be used for Real Estate purpose and for onward lending. There are limits on rate of interest and tenure of such loans.