Investment Facilities for NRIs

Under extant FEMA guidelines, NRIs are permitted to invest on repatriation basis in:

  • Government dated Securities / treasury bills.

  • Units of domestic mutual funds.

  • Bonds issued by a public sector undertaking (PSU) in India.

  • Non-convertible debentures of a company incorporated in India.

  • Shares in Public Sector Enterprises being divested by the Government of India, provided the purchase with the terms and conditions stipulated in the notice inviting bids.

  • Shares and convertible debentures of Indian companies under FDI scheme (including automatic route and FIPB).

  • Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme.

  • Perpetual debt instruments and debt capital instruments issued by banks in India.

Other Investments on non-repatriation basis.

  • Government dated securities (other than bearer securities) / treasury bills.

  • Units of domestic mutual funds.

  • National plan Savings Certificates.

  • Non-convertible debentures of a company incorporated in India.

  • The capital of a firm or proprietary concern in India, not engaged in any agricultural or plantation activity or real estate business.

  • Deposits with a company registered under Companies Act, 1956 including NBFC registered with RBI.

  • Commercial Paper issued by an Indian company.

  • Shares and convertible debentures of Indian Companies other than Portfolio Investment scheme.

Portfolio Investment Scheme for NRIs

  • Under this scheme NRIs and PIOs can purchase or sell Shares/convertible debentures of Indian companies on Stock Exchanges.

  • For this purpose, the NRI/PIO has to apply to a designated branch of a bank, which deals in Portfolio Investment.

  • All sale / purchase transactions are to be routed through the designated branch.

  • An NRI or a PIO can purchase shares up to 5% of the paid up capital of an Indian company.

  • All NRIs/PIOs taken together cannot purchase more than 10% of the paid up value of the company. (This limit can be increased by the Indian company to 24% by passing a General Body resolution).

  • The sale proceeds of the repatriable investments can be credited to the NRE / NRO accounts of the NRI / PIO whereas the sale proceeds of non-repatriable investment can be credited only to NRO accounts.

  • The sale of shares will be subject to payment of applicable taxes.

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