1. Can NRIs invest in India? Accounts and the PIS route
Direct answer: yes — NRIs can invest in almost every Indian asset class, but every route starts with the right bank account: NRE for repatriable funds earned abroad, NRO for India-source income, and a PIS designation when you trade listed equities.
An NRE account holds foreign-earned funds in INR and is fully repatriable, principal and interest. An NRO account holds India-source income (rent, dividends, pension) and is repatriable only up to USD 1 million per financial year with CA certification (Form 15CA/CB). The Portfolio Investment Scheme (PIS) is a separate RBI route layered on top of an NRE/NRO account that lets NRIs buy and sell listed Indian equities through a designated bank. Most other investments — mutual funds, bonds, GIFT City units — do not need PIS and run straight off the NRE/NRO account.
2. Mutual funds and SIPs for NRIs
Direct answer: NRIs can invest in Indian mutual funds and run SIPs from NRE or NRO accounts — but if you are tax-resident in the US or Canada, most fund houses will refuse you because of FATCA paperwork.
Mutual funds are the most accessible India entry point for NRIs: low ticket sizes, no PIS account, automated SIPs, and repatriable returns when funded from an NRE account. The catch is jurisdictional: roughly half the AMCs do not onboard US/Canada residents because FATCA reporting raises their compliance cost. Workable AMCs do exist, but you may need to shortlist by jurisdiction before by strategy. KYC needs a fresh in-person verification or video KYC, your passport, OCI card or visa, and an overseas address proof.
3. Direct equity and the Portfolio Investment Scheme
Direct answer: NRIs can buy Indian shares directly under the PIS route — open a PIS-designated NRE or NRO account, pair it with a demat and trading account, and trade on the secondary market within RBI limits.
PIS funded from an NRE account gives you repatriable equity exposure; PIS on an NRO account is non-repatriable beyond the USD 1 million annual ceiling. RBI caps aggregate NRI holding in any Indian company at 10% of paid-up capital (24% with shareholder approval), and certain sectors are off-limits. NRIs cannot do intraday or short-selling in cash equities and cannot trade currency derivatives; derivatives in equity are allowed on a non-repatriable basis. IPOs and bonds are available directly without PIS.
4. Crypto / VDAs — 30% flat tax, 1% TDS, no set-off
Direct answer: if you are taxable in India on Indian-source crypto activity, your gains on virtual digital assets are taxed at a flat 30%, with 1% TDS on every transfer and no set-off of losses against any other income — the same harsh regime that applies to residents.
Section 115BBH taxes all VDA gains at 30% with no deduction other than cost of acquisition. Section 194S withholds 1% TDS on transfers above the threshold, regardless of profit, which makes high-frequency trading economically punishing. Losses from one VDA cannot offset gains on another, and cannot be carried forward. For NRIs, the question is whether the activity is even Indian-source — trading on an offshore exchange from outside India typically is not, but using an Indian exchange, INR rails or an Indian bank account brings you squarely inside the regime.
5. The GIFT City route for NRI investors
Direct answer: GIFT City IFSC lets NRIs invest in dollar-denominated funds and products inside India under a concessional tax regime — often a cleaner route than offshore platforms.
For higher-ticket investors, GIFT City offers AIFs, family investment funds, USD fixed-deposit-like products and ULIPs under the IFSCA regime. Investments are USD-denominated, the regime carries a multi-year tax holiday at the fund level, and you avoid the FATCA-onboarding friction that blocks US/Canada NRIs from mainstream Indian AMCs. The trade-off is ticket size and product complexity. See our GIFT City IFSC for NRI founders & funds guide for the structural detail.
6. Tax on returns, TDS and repatriation
Direct answer: NRI investment income is generally subject to TDS at the source before it hits your account, and repatriation rules differ by account and asset — plan the exit before you plan the entry.
Listed equity LTCG above the threshold is taxed at the prescribed rate; STCG on equity at 20%; mutual-fund taxation follows the equity/debt classification with TDS deducted by the AMC for NRIs; interest on NRO deposits is taxed in full with 30% TDS; NRE interest is tax-exempt and fully repatriable. For property and large rupee balances, repatriation runs through Form 15CA/15CB and the USD 1 million NRO ceiling — covered in our property repatriation and OCI & FEMA hubs. DTAA relief between India and your country of residence usually fixes the worst double-tax outcomes if claimed correctly in your ITR.
7. Five mistakes NRIs make when investing in India
- Investing through a resident savings account. Continuing to use the old resident bank account after becoming an NRI is a FEMA breach and contaminates the repatriability of every investment funded from it.
- Ignoring FATCA at KYC. US and Canada residents who hide tax-residency at onboarding cause the AMC to freeze redemptions later — declare upfront and pick an AMC that accepts your jurisdiction.
- Treating NRO income as repatriable. Rent, dividends and India-source capital gains go into NRO, and repatriation needs 15CA/15CB. Funding NRO via an NRE-to-NRO transfer makes those funds non-repatriable.
- High-frequency VDA trading through Indian rails. 1% TDS on every transfer and no loss set-off destroys returns. If the activity is genuinely offshore, keep it offshore and document it.
- No DTAA claim in the ITR. Many NRIs pay full Indian TDS and full home-country tax on the same income because they never file Form 67 or claim treaty relief.