India has become one of the fastest growing markets of South-East Asia and this is the reason a large number of Non-Resident Indians (NRIs) are queuing up to grasp the benefits here. So, if you are an NRI and want to invest in India, then here we are going to discuss some of the best investment options in India:
However, before investing in India, an NRI has to open an NRO or NRE bank account and should have the PAN (Permanent Account Number) to explore different investment options available.
NRE and NRO bank Accounts: An NRE and NRO bank accounts are Rupee Bank accounts for the NRIs. These accounts can be opened in any of the private or public nationalized banks. The NRE account provides the reparability on both interest and principal, whereas the NRO account provides reparability on amounts that are up to $1 million including on interest and principal. With basic details of Know Your Customer and other supporting documents for verification, you can very easily open an NRO or NRE account.
As soon as you have an NRO or NRE account, you can invest in any of the below-mentioned assets in India:
- Foreign Currency Non-Resident (FCNR) Account: It works as one of the good investment options for NRIs as it offers full-reparability and tax-free interest.
- NRO or NRE Bank Accounts: With investment in secondary markets, the NRE and NRO bank accounts are also good investment options for NRIs. These accounts work as one of the safest options for investing your money.
- Real Estate: The real estate market is booming in India and as an NRI you can either invest in residential or commercial property. However, NRIs cannot invest in farms and agriculture lands, but you can own one if these lands are gifted to you or you have inherited it. All the settlements related to real estate have to be done through NRO accounts only that have restrictions on repatriation.
- Equity Market: You can also invest in the equity market or shares as well even if you an NRI. You need to open trading and demat account with an authorized broker by taking a letter of permission from the Reserve Bank of India (RBI) under Portfolio Investment Scheme (PIS).
- Term and Fixed Deposits: A fixed deposit is an investment wherein you invest for a specific lock-in period and get the returns. On the other hand, term deposits also have a lock-in period and are provided by the banks, non-banking financial organizations, and other private companies. This kind of investment becomes tax-free if you invest through NRE accounts. However, the investments that are made through NRO accounts can come under TDS.
- Non-Convertible Debentures (NCDs) and Bonds: Various NCDs and bonds are issued by the Government of India, private corporations, and Public Sector Units (PSUs) for returns and better liquidity. To make investments in any of these options, you need to have NRE or NRO account with a letter of permission of PIS.
- National Pension Scheme (NPS): If you have retained your citizenship of India and want to live here after your retirement, then it is best to invest in NPS. NPS offers tax exemptions and for the same, it follows Exempt – Exempt – Tax (EET) structure. It as well offers very good returns and is considered as one of the reliable investment plans for those who have the desire to retire in India.
- Mutual Funds: Various domestic mutual funds, which invest in several debt securities and equities, are available for NRIs as well in India. So, you can also invest in mutual funds despite being NRI. Mutual funds offer great returns and you need not to monitor them.
Over to You: With these words, we are giving the ball in your court and it’s your responsibility to decide which investment type you want being NRI from the fleet of options for the same available in India. Before selecting an option, it is suggested to do proper research about that option and take it only when it is feasible to you. Never go for an investment plan just because it has been taken by one of your colleagues or friends. Do a proper research and then only start investing in anything. We have provided the list of top investment options in India and you can select one after seeing its pros and cons for you.