A Non-Resident Indian is a person who stays outside India for more than 182 days in a financial year for employment or business.

How can an NRI invest in India?

An NRI can either invest directly or through a Resident by vesting the Power of Attorney with the Resident.

Why do I need to send physical documents to open an Equity Account?

The physical documents are to ensure compliance with the governing bodies for Equities.

How will my Indian investments be taxed?

If the country you reside in has signed DTAA (Double Tax Avoidance Agreement)with India, your investment is subject to taxation in a single country only - either in India or in your country of residence. If not, your investment is subject to double taxation.

Can an NRI invest in Mutual funds in India?

Certainly, NRIs can invest in Mutual funds in India. However, a Demat account is necessary to make any kind of investment as an NRI

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Best Investment Options for NRIs

Equities

NRIs can invest in Indian equities through Portfolio Investment Schemes (PIS) regulated by the RBI. Investing in individual stocks offers a high return potential, especially in India’s growing market. However, it also comes with volatility and risks. Equities are ideal for long-term investors looking for capital appreciation. NRIs can use their NRE or NRO accounts for equity investments. Researching sectors like IT, banking, and healthcare that drive India’s growth story can benefit NRIs.

Mutual Funds

Mutual funds offer NRIs a diversified and professionally managed way to invest in Indian markets. NRIs can invest in both equity and debt funds. SIP (Systematic Investment Plans) allows them to invest regularly, reducing the impact of market volatility. Mutual funds are taxed similarly for NRIs and resident Indians, except for some differences in repatriation rules. NRIs can invest via their NRE/NRO accounts, making it a convenient and tax-efficient option for building wealth over time.

Fixed Deposits

Indian banks offer fixed deposits (FDs) for NRIs, which can be a safe, low-risk option for those looking for steady returns. NRIs can choose between NRE FDs (tax-free and fully repatriable) and NRO FDs (taxable but suitable for income earned in India). NRE FDs offer better returns compared to FDs in many other countries, making them an attractive option for conservative investors. The tenure and interest rates vary, allowing flexibility depending on one’s financial goals.

National Pension System (NPS)

NPS is a retirement-focused investment option available for NRIs. It offers tax benefits under Section 80C and helps build a retirement corpus by investing in a mix of equities and debt instruments. NPS has a lock-in period until retirement, and withdrawals can be made as a lump sum or annuity. Its low-cost structure and government backing make it a secure and long-term investment option, especially for NRIs planning to settle in India post-retirement.

NRI Investment Opportunities in India – Grow Your
Wealth with FundsIndia

Why NRIs Should Invest in Indian Mutual Funds

For members of the Indian diaspora, India offers an array of financial instruments that are attractive for building wealth. One such opportunity is mutual fund investments, which allow Non-Resident Indians (NRIs) to participate in India’s growth story.
Whether you’re an Overseas Citizen of India (OCI), a Person of Indian Origin (PIO), or simply an NRI, you can easily invest in Indian mutual fund schemes through FundsIndia. With the right investment strategies,NRIs can diversify their portfolio and benefit from the competitive interest rates in India.

Can NRIs Invest in Mutual Funds in India?

Yes, NRIs can invest in mutual funds in India. Under the provisions of the Income Tax Act and guidelines from the Reserve Bank of India (RBI), NRIs, OCIs and PIOs are eligible to invest in mutual fund schemes offered by Asset Management Companies (AMCs) in India. Investments can be made through NRE, NRO or Foreign Currency Non-Resident (FCNR) accounts.
To facilitate this, most AMCs have made the investment process convenient and accessible for NRIs by offering online platforms and simplified documentation procedures. NRIs can choose from various mutual fund options, including equity, debt, hybrid, and tax-saving funds, depending on their risk appetite and financial goals.
Moreover, the income generated from these investments is subject to specific tax regulations in India. The tax treatment depends on the type of mutual fund, the holding period, and whether the NRI is investing through an NRE account or an NRO account. While returns on investments from NRE accounts are generally repatriable, the same from NRO accounts might have restrictions depending on specific tax laws. Additionally, some countries have Double Taxation Avoidance Agreements (DTAA) with India, which NRIs can use to avoid being taxed twice on the same income.
NRIs looking to invest in Indian mutual funds should be aware of currency fluctuations, local taxation, and other regulations. It is always advisable to consult a financial advisor to ensure that their investment strategy aligns with both their long-term goals and the applicable laws in both India and their country of residence.

How Can NRIs Invest in Mutual Funds through FundsIndia?

Investing in mutual funds as an NRI is straightforward with FundsIndia. Here’s
a step-by-step guide:

Open an NRI Account

You’ll need an NRE or NRO account to invest in Indian mutual funds. These accounts enable you to handle investments in both Indian Rupees (INR) and foreign currency.

Submit KYC Documentation

As an NRI, you need to complete Know Your Customer (KYC) requirements, which include providing documents like your passport, overseas address proof, and Indian citizenship proof if applicable.

Select Your Mutual Fund Scheme

FundsIndia provides access to a wide range of mutual fund schemes based on your investment goals, whether you want to invest in equity, debt, or hybrid funds.

Power of Attorney (PoA)

If you prefer, you can appoint a Power of Attorney (PoA) to operate your mutual fund account in India on your behalf.

Investment Methods

You can choose to invest via Systematic Investment Plans (SIPs) or through a lump sum amount, depending on your financial strategy.

Benefits of Investing in Indian Mutual Funds for NRIs

Diversification

By investing in Indian mutual funds, NRIs can diversify their portfolio across emerging markets, gaining exposure to India’s fast-growing economy.

Tax Benefits

Certain mutual fund schemes offer tax benefits under Section 80C of the Income Tax Act, helping you save on taxes.

Professional Management

Your investments are managed by expert fund managers, who use their experience and insights to help you grow your wealth.

Access to High Interest Rates

Indian mutual funds offer competitive returns, often outperforming traditional savings accounts, even with market risks considered.

Flexibility in Investment

Choose from various types of mutual funds based on your risk appetite and time horizon—whether for short-term needs or long-term wealth building.

Types of NRI Accounts for Mutual Fund Investments

NRIs can invest in mutual funds in India through the following accounts

NRE Account (Non-Resident External Account)

This account allows you to invest your foreign earnings in Indian mutual funds. Both the principal and interest are fully repatriable, meaning you can transfer funds back to your country of residence without restrictions.

NRO Account (Non-Resident Ordinary Account)

This account is used to manage income earned in India, such as rent or dividends. Investments made through an NRO account may be subject to tax, and only the interest earned is repatriable.

FCNR Account (Foreign Currency Non-Resident Account)

You can hold your deposits in foreign currency in this account, safeguarding your investments against fluctuations in exchange rates.

Tax Implications for NRI Mutual Fund Investments

NRIs should be aware of the tax implications when investing in Indian mutual funds

Equity Funds

Capital gains from equity mutual funds held for less than one year are taxed at 15%, while gains from funds held for over one year are taxed at 10% for gains exceeding ₹1 lakh.

Debt Funds

For debt mutual funds, short-term capital gains (for investments held under three years) are added to your total income and taxed according to your income tax slab. Long-term capital gains are taxed at 20% with indexation benefits.

TDS (Tax Deducted at Source)

NRIs are subject to TDS on capital gains from mutual funds. It is deducted at source when the investor redeems the mutual fund units.

Invest with Confidence – Start Your NRI Mutual Fund Journey Today

At FundsIndia, we offer tailored solutions for NRIs to seamlessly invest in Indian mutual funds. Whether you’re looking for long-term wealth creation or short-term investment options, our platform provides all the tools you need to make informed financial decisions.