Over the past few years, India has been emerging out as one of the fastest growing economies in the world after China. With several business-friendly initiatives being implemented by the Government such as Good & Services Tax (GST) and revised FDI policy, India is soon to become a global investment paradise for Non Resident Indians (NRI) and other prospective investors.
Reserve Bank of India (RBI) has allowed NRIs to invest in Indian stock market by buying shares/convertibles of listed Indian companies on recognized stock exchanges, e.g. BSE and NSE, under Portfolio Investment Scheme (PIS) with banks. For NRI investment, there are myriads of opportunities available in the Indian markets.
To start with, a Non Resident Indian (NRI) must have an NRE bank account. Anon-resident (external) rupee account (NRE) account is preferable because it gives NRIs the flexibility of repatriating their earnings out of India without any constraint. Financial experts also suggest NRE accounts to those who are not sure about their stay in overseas and their chances of them settling abroad.
For those who’re looking to invest in mutual funds, there are various options available in Indian banks; both private and public, offering different investment options. As mutual funds provide a high level of diversification and liquidity, investment in mutual funds in India is the most preferred way to keep the money earned or acquired in India before and after becoming an NRI. In addition, mutual funds investment is an easy to use tool in today’s complex financial markets.
Most of these funds are managed by experienced and knowledgeable professionals who analyze the most profitable investment avenues for investors. These funds provide investors a high degree of flexibility with features such as systematic investment plans. Furthermore, mutual funds can be purchased in small units and the diversification warrants lower risk.
A NRI can expect a smoother journey towards his or her investment in the Indian markets through focused NRI portfolio management. A dedicated relationship manager will be assigned to the investor who can seek to get full-fledge investment assistance in various securities.
NRIs from most countries can choose to invest in India through MFs available here. For US-based NRIs though, it gets a bit complicated.Most US-based fund houses that operate in India do not accept money from a US-based NRI because there is a rule given by the US securities market regulator, Securities and Exchange Commission (SEC), which says only those fund houses, globally or locally, registered with SEC can accept US NRI or citizen’s money.
However, there are other options also available. For example, an NRI can consult some Indian fund houses that don’t have any business interests in the US and therefore no interaction with the SEC.
At the outset, there are tons of NRI investment options available in India that can be explored by interested investors.
Investment Options for NRIs in India
India offers a multitude of investment options for NRIs like bank FDs, mutual funds, Indian stocks, corporate and govt. bonds and even real estate. NRIs who want to leverage the growth potential of the India economy that is poised to be among the top 5 economies in the world should carefully evaluate each of these options in the context of their requirement before investing their money for the short or long term.
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