Investment Options for NRIs/OCIs in India

For Non-Resident Indians (NRIs), investing in India is a great option to enter one of the fastest-growing economies in the world. There are different investment opportunities in India for NRIs, and they can choose according to their requirements. Choose the level of risk you want to take and maximize your returns. By investing in multiple assets, NRIs can also build a strong portfolio for investment, which can help in establishing a successful wealth for generations. 

In this guide, we have shared different investment options for NRIs in India, how they can buy them, their importance, and much more. You will understand all about the Investment plans for NRIs after reading this blog. Educate yourself first and then choose the right plan for you. 

Investment Options for NRIs in India

There are so many investment opportunities for NRIs in India. They can choose the best investment plan as per their objectives and risk preferences. Here is the list of the best investment options for all Non-Resident Indians (NRIs) that can provide long-term wealth and a stable income: 

1. Fixed Deposits

It is considered one of the safest investment options for NRIs, as your money will be kept in a bank account for a specified period, along with its interest. Here are the types of NRI accounts that you can open in India to keep your money:

• NRE Account (Non-Resident External Account)
• NRO Account (Non-Resident Ordinary Account)
• FCNR Account (Foreign Currency Non-Resident Account)

2. Real Estate

Real Estate is considered one of the best and favorite investment options for all NRIs. It is the best source of income in the long run for NRIs as they can easily afford to buy these financial assets. 

3. Mutual Funds

Mutual funds also have higher returns, which are tax-efficient, but there is more risk involved in them as compared to FDs. You can invest in the mutual funds through various SIPs (Systematic Investment Plans). Before investing, you should always read the terms and conditions of all the plans and choose according to their risks.

4. National Pension Scheme

These ways of Investment are also available for those NRIs who are between the ages of 18 and 60 years old. You can easily start investing in the Active choice mode, where you can decide the allocation of assets, such as government securities, corporate bonds, equity, etc. If yoy are a beginner and don't have much knowledge, then you can also select the Auto Choice where your assets will be allocated automatically as per the age of the policy holder.

5. Investment in Equity

Equity investments are for those investors who understand the market and can take the higher risks. There is a big growth potential in this investment opportunity. Before you start trading in the Indian Stock Market, you should open your trading and demat account along with the NRE/NRO bank accounts.

6. Retirement Plans 

Choose these if you want a long-term, serious investment plan for investment. The NPS (National Pension System) is a low-cost savings program supported by the government. This provides the NRIs a choice of investments, and it offers you a way to build your retirement savings.

7. ULIP Plans

The NRIs are given the same rights as residents to invest in the ULIPs (Unit-Linked Insurance Plans) by the Foreign Exchange Management Act (FEMA). The ULIP plans provide the users with both an investment and an insurance coverage in one product. They provide transparency, tax benefits under Section 80C, and a great way to generate wealth. 

8. Child Plans

This investment plan is primarily made to secure the future of your child. You can invest in these plans to cover the major costs for your child in the future, such as a wedding or higher education. In these plans, the insurance is combined with the investments, and your child will receive the money under all conditions.

9. Guaranteed Returns Traditional Plans

These investment plans offer a guaranteed return at the time of maturity as they are a type of conventional insurance savings scheme. This plan is best for those NRIs who want to get a predictable return to complete their long-term objectives in the future without risking too much. 

10. Capital Guarantee Solution Plans 

This is also considered a risk-free investment plan with good returns. There is a safety that your initial amount is secured, and there is a chance of market-driven growth. In this plan, your principal amount is completely safe, and you can still earn the profit from any gains.

11. Stock Market Investments

If you make direct investments in the indian stock market, then it can provide you with very high returns. With the help of a PIS (Portfolio Investment Scheme) account, an NRI can easily invest in the listed companies. This PIS account should be linked to their NRI vbank accounts, such as NRE/NRO, and their trading and demat accounts. This investment plan is for those NRIs who are ready to take a higher risk and have a good knowledge of the stock market. 

12. Gold

If you want to diversify your portfolio, then investing in gold can be a great way to do so. There are different types through which the NRIs can invest in gold and earn benefits. You can invest in Sovereign Gold Bonds (SGBs) as they provide the tax exemption on capital gains after maturity, or you can also invest through the Gold ETFs (Exchange Traded Funds), which can provide you with an interest annually, and they can be traded at the stock exchange.

13. Initial Public Offerings (IPOs)

The NRIs can also invest in IPOs (Initial Public Offerings), where the companies offer their shares to the public. In a prospective business, the IPOs can give the listing benefits and provide future growth opportunities. 

14. Portfolio Management Services (PMS)

This option is best for those NRIs who have a high net worth and are ready to invest a large sum of money (generally more than 50 lakhs). Portfolio Management Service (PMS) provides you with a personalized portfolio that is managed by professionals. In this type of investment plan, a strategy is built by a fund manager according to your risk profile and financial goals.

Reasons for NRIs to invest in India

Here are the strong reasons why the NRIs should consider making investments in India:

1. Gain Higher Returns

If we compare the value of the rupee with the dollar, then it is much lower, which means that if you make your foreign investments using the Indian investment plans, there will be higher returns. If you invest in real estate in India, then it will be more approachable and affordable for you. 

2. Diversification

If you are an investor with some basic knowledge, then you must know that it is important to invest in multiple assets to diversify your portfolio. To diversify, you can invest in bonds, stocks, equity, liquid funds, debt funds, etc. By diversifying your investments, you can minimize the risk, and it will help you to modify your portfolio for more returns.

3. Plan your Retirement

To meet your retirement goals, it is not enough to just save the money. If you want to maintain the same lifestyle, you need to start investing. Creating a strong foundation for life and building a plan for retirement is much cheaper in India compared to other countries, like the US. You can invest in various things like mutual funds, stocks, real estate, etc.

Ways to Select the Best Investment Plans for NRIs

You need to be very strategic to choose the accurate investment plan for yourself. You should pick the one that actually fulfills your financial needs. As an NRI, you should consider the points mentioned below before choosing the investment plan:

1. Be clear about your financial goals

The first thing that you should know is the type of investment you are going to make. Know your objective clearly, such as retirement planning, a child's future, property sale, or just earning money. If you are clear about your financial goals, then it becomes very easy to decide the investment plan that suits you best. 

2. Understand the Investment Horizon

It is a very important factor while considering the best plan for NRI investment. You should know the time you can stay invested in a particular plan. For the long-term investments, you can go for the equity-linked ones as they will grow throughout the market variations and provide the best returns. For short-term investments, you can go for fixed deposits or debt instruments.

3. Know your risk Appetite

The NRIs should know the degree of risk they are willing to take while investing. If they have a low-risk tendency, then consider fixed deposits, debt mutual funds, or guaranteed plans. If you can take higher risks with higher returns, then go for direct equity or equity mutual funds. 

4. Understand the concept of Repatriability

You should know beforehand that you want to eventually go back to your country of residence. The investments you make under the NRE accounts are completely repartiable, but the investments made under NRO accounts are partially restricted. Hence, you should choose the right type of investment plan accordingly.

5. Consider Taxation

It is necessary for the NRIs to know all the tax implications on investments in their country of residence or in India as well. Although some parts of returns, such as the interest on the NRE account, are totally tax-free in India, while the other types of returns can be taxed, such as capital gains tax and TDS (Tax Deducted at Source).

Required Documents for NRIs to Invest in India

The list of required documents is dependent on the type of investment you make and the financial institution. However, here is the list of the standard supporting documents that you will require:

• Identity Proof: It includes a copy of your valid passport with the pages of your visa and OCI/PIO cards.
• Address Proof: It includes the proof of your Overseas address, including the utility bills, bank statements, etc., and proof of your Indian address also.
• PAN Card: It is an important document needed for all investments.
• Photographs: Your recently clicked passport-sized photographs.
• Details of Bank Account: A proof of your NRI accounts, including NRE and NRO (bank statement or cancelled cheque).
• Proof of your NRI status: It includes a valid student visa, employment visa, or work permit.

Steps for NRIs to Invest in India

The NRIs can smoothly invest in India as the process is well-regulated and streamlined. Here is the step-by-step process by which you can purchase the different investment plans for NRIs in India:

1. Open an NRI Bank Account

The first thing an NRI should do is to open an NRE (Non-Resident External) and/or NRO (Non-Resident Ordinary) account. You can use the NRE accounts to manage the foreign earnings and use your NRO to manage the Indian income. 

2. Get a PAN Card

It is crucial to obtain a Permanent Account Number (PAN) to perform all the financial transactions in India, such as buying property, investments, etc. 

3. Comply with all the KYC Rules

You have to complete the process of KYC (Know Your Customer). You can do it by submitting the required documents of identity and address proofs. This one-time process is necessary for all the investments for NRIs.

4. Choose the right one and invest

After your KYC is completed and the account is set up, you can choose the investment plan as per your needs. It can be stocks, mutual funds, fixed deposits, insurance plans, etc. Choose the right one for yourself and start investing right away through the accurate investment channels.

Eligibility Criteria for NRI Investments in India

The eligibility of an individual to invest in India through the various opportunities for NRIs primarily depends on their residential status. Its definition is given by the Foreign Exchange Management Act (FEMA). Here the the criteria for eligibility:

• If you are an Indian citizen who is living in a foreign country for employment purposes, business, etc. It also includes the other purpose, which indicates their stay abroad for an indefinite duration.
• If you are posted in a foreign country by the Indian Government or under any public sector.
• If you are an Overseas Citizen of India (OCI) or a Person of Indian Origin (PIO).

Why Choose Visament? 

India offers many investment plans that can satisfy your risk appetite and hope of high returns. There are many factors that come into consideration before starting the investment. The most important thing for starting this process is to open an NRI account in India. If you don't know the process to open the NRE/NRO accounts in India, then you can take expert assistance from the professionals of Visament. 

They have the experience of many years in providing services for the NRIs. We also have customized plans for the NRIs at every affordable price. The experts are very patient and helpful on our platform, and they are available 24/7 to assist you. You can also get assistance for the investments from our website.