Tuesday, September 22nd, 2020

NRI investments in India


The Mechanism to channelize NRI investments in India

Non-Resident Indian (NRI) means a person resident outside India who is a citizen of India or is a person of Indian origin”.


Need for NRI Investments:

Ø Increase in equity level must be from expansion of the equity base.

Ø Requirement of Nuclear energy is used in conjunction with other energy sources (such as fossil fuels, hydroelectric and renewable sources) to address current and future needs, as no one source has the capability of supplying all of the world’s energy requirements.

Ø Need to invest in housing and urban development sector.

Ø Need a healthy air transportation industry is especially important for bringing tourists into the country, but airline companies face challenges to their ability to sustain business over the long term.

Ø Necessity to improve the economical growth facilities and add the value additions to the growth of the country.

Ø Necessary to built Entrepreneurship and improve the Stock Exchanges for the various product and Necessary transaction of the immovable property in India.

Purpose of NRI Investment:

  • NRI investment would like to have a long-term view into India, given the upcoming demographic dividend, and the overall growth prospects.
  • Non-resident foreign citizens of Indian origin are treated on par with NRI citizens for the purpose of certain facilities
  • The deposits can be used for all legitimate purposes.
  • NRI also provides for the devolution of Transport planning, services and infrastructure development to transport authorities.
  • The purpose of NRI is to share a common exchange for Indians worldwide to sell or buy real estate in India; including land, flats (apartments), independent villas and houses.
  • Increase in equity level must result from the expansion of the equity base of the existing company without the acquisition of existing shares by NRI/foreign investors
  • NRI has provided high-quality
  • NRI has provided high-performance systems solutions services to both the life and non-life insurance industries.
  • NRI to invest on the country’s growing economy powerful
  • Issue and acquisition of shares by non-residents after merger or de-merger or amalgamation of Indian companies
  • Purposes of carrying out employment or any business or vocation
  • Proposed expansion programme should be in the sector(s) under automatic route.
  • Interest lying to the credit of NRE accounts is exempt from tax in the hands of the NRI.
  • Purposes of transactions, i.e., transfer, sale, purchase, etc., dealing with immovable property in India
  • Acquisition, holding, transfer and disposal of immovable properties in India except of agricultural/plantation properties
  • Admission of children in educational institutions in India under the general category quota for NRI – including medical/engineering colleges, IITs, IIMs etc.
  • Various housing schemes of Life Insurance Corporation of India, State Governments and other Government agencies

Mechanism Structure of NRI Investment in India:

NRI can invest in India as under:

  • Investment under Automatic Route with repatriation benefits
  • Investment with Government approval
  • Other investments with repatriation benefits
  • Investments up to 100% equity without repatriation benefits
  • Other investments by NRIs/OCBs without repatriation benefits.

Procedure for making investments:

  • The NRI has to designate a branch an authorized dealer (bank) for routing his transactions relating to purchase and sale of shares/convertible debentures under this Scheme.
  • The NRI investor will have to take/give delivery of the shares / convertible debentures purchased/sold.
  • Payment for purchase of shares and /or debentures can be made by inward remittance in foreign exchange through normal banking channels or out of funds held in NRE/FCNR account maintained in India is the shares are purchased on repatriation basis and by inward remittance or out of funds held in NRE/FCNR/NRO account of the NRI concerned maintained in India where the shares and /or debentures are purchased on a non-repatriation basis.
  • The NRI can authorize an Indian Resident or a broker or a relative or a friend to deal in shares and debentures (other than bearer securities).
  • 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. (The Indian company to 24% can increase this limit by passing a General Body resolution).
  • The sale proceeds of the repatriable investments can be credited to the NRE/NRO etc. 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.
  • Non-resident persons have been given a special status under the income tax law.
  • NRIs are permitted for transfer/ sale of shares/ debentures/ bonds by NRIs/ OCBs through stock exchanges if such transfers are made in favor of an Indian citizen or a person of Indian origin or a company incorporated in India. Sale proceeds of such transactions have to be credited to NRO account. NRIs are required to submit applications on form TS 1 to Reserve Bank of India for sale of shares/ debentures by private arrangements.

NRI are granted the following facilities:

  • Maintenance of bank accounts in India.
  • Investments in securities/shares of, and deposits with, Indian firms/companies.
  • Investments in immovable properties in India.
Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • LinkedIn
  • RSS
  • Technorati
  • Twitter


One Response to “NRI investments in India”
  1. Madhava Dhanvada says:

    NRI/OCI wishes to open a trading account in India. What types of documents are required in support of the application? Can this be done on-line?

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

Secure Linux Web Hosting