Yes, NRIs can invest in all avenues open to resident Indians. Persons of Indian origin are restricted to investment in non-agricultural businesses in the country.

Investment options available to NRIs under FDI route can be broadly classified under two heads namely:

I. Automatic Approval Route.
II. Prior Approval from Government Route.

Presently most of the activities are under Automatic approval Route i.e 100% FDI. No approval is required for FDI in case of activities under Automatic Route only a notification to RBI is required within 30 days. Cases that are not covered under the Automatic Route fall under Prior Approval from Government Route. Approval from government is required in such cases.

As per the regulations NRIs are allowed to invest up to a certain percentage of the total paid up capital of the company by directly subscribing to the equity/convertible debentures of the company either though a public offering made by the company or through private placements on one to one basis. Regulations provide for different ceilings on such investments based on the industry to which the company belongs and also the nature of investments (repatriation/non-repatriation basis).

Portfolio Investment Scheme (PINS) is a scheme of the Reserve Bank of India (RBI) defined in Schedule 3 of Foreign Exchange Management Act 2000 under which the ‘Non Resident Indians (NRIs)’ and ‘Person of Indian Origin (PIOs)’ can purchase and sell shares and convertible debentures of Indian Companies on a recognized stock exchange in India by routing all such purchase/sale transactions through their account held with a Designated Bank Branch .

1. An NRI should open a new bank account with designated bank branch which is approved by RBI (Reserve Bank of India) for this purpose.
2. He should apply for a general approval for investment in Indian Stock Market through his designated bank branch.
3. He should open a Demat Account with a Depository Participant to hold his shares.
4. He needs to register with a broker to execute his buy/sell orders on the stock exchange(s).

The application is to be submitted to Reserve Bank through a designated branch of a bank in India in one of the prescribed forms, i.e. NRC/NRI/RPC/RPI.

Reserve Bank has authorised a few branches of each bank to conduct the business under Portfolio Investment Scheme on behalf of NRIs . These branches are the main branches of major commercial banks located close to the stock exchange/s. NRIs will have to route their applications through any of the designated bank branches who have authorisation from Reserve Bank.

No. Each NRI has to select one branch for this purpose for investment on repatriation/ non-repatriation basis.

It is advisable to maintain a bank account with the designated branch for administrative convenience.

Reserve Bank approval is valid for a period of five years from the date of issue. This can be renewed further by making a request by means of a simple letter.

Funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts. obtain to invest under the Portfolio Investment Scheme?

NRIs are allowed to invest in Indian equity markets under the Portfolio Investment Scheme. Under this scheme NRIs are permitted to invest in shares/debentures of Indian companies through Stock Exchanges in India. These investments require prior approval of RBI Designated branch of authorized banks have been now empowered to issue such permissions to NRIs.

Broadly, NRIs are allowed to invest under the Portfolio Investment Scheme (buying through the secondary market) and through the Direct Subscription route (Investments though IPOs/offer for sale /Private Placements).

Yes. Investment can be made on repatriation as well as non-repatriation basis. However, an NRI will have to open NRE account as well as NRO account with designated bank branch as the sale proceeds of non-repatriation investment can only be credited to NRO account.

There is an overall ceiling of 5% of paid- up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs /OCBs. The overall ceiling can be raised to 30% if the company concerned passes a special resolution to that effect in its general body meeting and a board resolution. Individually, NRIs/OCBs can make investment upto 1% of the paid-up equity share capital/each series of convertible debentures. However, there is no ceiling on investment in domestic Mutual Funds.

The repatriation of the sale proceeds, net of taxes, are allowed if the original purchase was made on repatriation basis and such investments were made out of funds from NRE/FCNR account or by means of remittance from abroad.

Yes, NRIs can invest without any limit on non-repatriation basis in shares and convertible debentures of Indian Cos., issued either by public issue or private placement or right issues. NRI can also purchase Govt. Securities (other than bearer securities), treasury bills, units of domestic mutual funds etc on non-repatriation basis.

An NRI should authorize only one branch of only one bank in India for the Portfolio Investment Scheme (PIS). Power of attorney should be granted in favour of a resident Indian/relatives to carry out the various formalities. The dividend and the capital originally invested along with the capital gains thereon can be repatriated only after he obtain a certificate from a Chartered Accountant declaring that proper tax has been paid or satisfactory arrangements have been made to pay it in proper time or if the NRI so wishes a no-objection certificate can be obtained from the Income-tax Department.
On receiving such NOC or Chartered Accountant's certificate, the proceeds would be repatriated or credited to the NRE/FCNR account of the NRI (which is equivalent to repatriation).

General permission of the RBI exists for sale of units of mutual funds to NRIs and FIIs provided the investment is being made through inward remittance through normal banking channels or by debit to the NRIs’ NRE/FCNR account. The returns are accordingly paid into the investor’s NRE/FCNR account.