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NRI

Who is an NRI

An Indian citizen or a foreign citizen of Indian origin who stays abroad for employment/carrying on business or vocation or under circumstances indicating an intention for an uncertain duration of stay abroad is a NONRESIDENT INDIAN ( NRI ).
Those who stay abroad on a business visit, medical treatment, study or such other purposes which do not indicate an intention to stay there for an indefinite period will not be considered as NRIs. Students who go abroad for studies with an intention to stay there for an uncertain period and who stay abroad for more than 180 days in the preceding financial year will be treated as Non Resident Indians.

Why invest in India

There are several good reasons for investing in India.
  • One of the largest economies in the world( 3rd largest economy).
  • Strategic location - access to the vast domestic and South Asian market.
  • Foreign investment is welcome, approval is required but is automatic in sixty categories of Industries.
  • Skilled man-power and professional managers are available at competitive cost.
  • One of the largest manufacturing sectors in the world, spanning almost all areas of manufacturing activities.
  • One of the largest pools of scientists, engineers, technicians and managers in the world.
  • Rich base of mineral and agricultural resources.
  • Long history of market economy infrastructure.
  • Sophisticated financial sector.
  • Vibrant capital market with over 9,000 listed companies and market capitalization of US$ 154 billion (March,1996)
  • Well developed RampD infrastructure and technical and marketing services.
  • Policy environment that provides freedom of entry, investment, location, choice of technology, production, import and export.

Tax benefits for NRI's

Income from the following investments made by NRIs/PIOs out of convertible foreign exchange is totally exempt from tax:
  • Deposits in under mentioned bank accounts
    • Non Resident External Rupee Account (NRE)
    • Foreign Currency Non Resident Account (FCNR)
  • Units of Unit Trust of India and specified mutual funds , other specific securities , bonds and savings certificates (subject to the conditions prescribed under the Income tax laws and regulations).
  • Dividend declared by Indian company.
  • Long term capital gains arising from transfer of equity shares in a company and/or equity oriented schemes of Mutual Funds , which are subject to Securities Transaction Tax.
It should be noted that the tax exemption related to NRE bank deposits will case immediately upon the NRI/PIO becoming a resident in India whereas the interest on FCNR bank deposits will continue to be tax free as long as the NRI maintains the status of the Resident but Not Ordinarily Resident or until maturity, whichever is earlier.

General permission to NRI / PIO’s

The Reserve Bank has granted general permission to NRIs/PIOs for undertaking direct investment in Indian companies under the automatic route, purchase of shares under Portfolio Investment Schemes, investment in companies and proprietorship/ partnership concerns on non-repatriation basis and for remittances of current income. NRIs/PIOs do not have to seek specific permission for approved activities under these schemes.
The Reserve Bank of India has further simplified financial transactions by NRIs/PIOs by granting general permissions to:
  • Resident individuals ,partnership/proprietorship concerns to avail the interest of bearing rupee loans from NRIs/PIOs out of funds remitted from abroad or out of funds held in their bank accounts in India, on non-repatriation basis,subject to two conditions; one of them being that the rate of interest on such loans should not exceed Bank Rate plus two percentage points.
  • NRIs/PIOs to transfer by way of gifts shares help by them in Indian companies and to transfer by way of gift immovable property held by them in India subject to compliance with other applicable rules/regulations including the provisions of Foreign Contributions Act,1976 by the charitable trust/organization concerned.
  • All domestic public/private sector mutual funds for issue of units to NRIs/PIOs on both repatriation and non repatriation basis.
  • NRIs/PIOs to place deposits with Indian firms, on non-repatriation basis and with Indian companies on non-repatriation basis out of domestic sources.
  • NRIs/PIOs for sale of shares acquired under direct investment schemes on stock exchanges in India.
  • NRIs/PIOs for transfer of shares, by way of sale under private arrangement to another NRI or to a resident.
  • RBI permission is not required for drawal of foreign exchange for purpose of trade marks or franchise in India.
  • NRIs/PIOs may remit the sale proceeds of immovable property without the lock in period of 10 years subject to a maximum of 1 million USD per calendar year.

Getting Started

Overview of India’s economy:
India: Accelerating growth
simple average of rates of growth of GDP in the preceding years

India is the largest democracy and 4th largest economy (in terms of purchase power parity) in the world. India is also tenth most industrialized country in the world. With its consistent growth performance and abundant high-skilled manpower, India provides enormous opportunities for investment, both domestic and foreign.
Major reform initiatives have been taken since 1991, in the fields of investment, trade, financial sector, exchange control simplification of procedures, enactment of competition and amendments in the intellectual property right laws, etc.
The service sector improved its performance significantly from 7.9% in 2002-03 to 9.1% in 2003-04. The strong performance of the capital goods sector coupled with increased imports of capital goods also augurs well for domestic capacity expansion in large number of industries. The present trend indicates a positive outlook for industrial growth due to increased capacity utilization, improved industrial climate, expanding external and domestic demand and ease in availability of credit.
The strong and positive outlook of both foreign and domestic investors indicates that India is ready for a big push as the growing interest of foreign investors is coinciding with the rising confidence of domestic private investors. The increasing efficiency and competitiveness of domestic producers, liberalized trade, and deregulated interest rate regime are critical contributors to both growth acceleration and macro economic stability.
Who can invest in Indian Stocks?
Who is a person resident in India?
Who is a Nonresident Indian?
Who is an PIO?
Who is a person Of Indian Origin (PIO)?
Benefits of Person Of Indian Origin (PIO) Card Scheme
Procedure for Application for PIO Card
Who is an Overseas Citizen of India (OCI)?
What are the investment opportunities available to NRIs in India?
Types of NRI bank accounts:
How can an NRI invest/trade in Indian stock markets?
General Permission to NRI/PIO’s:
Direct investment opportunities:
Other investments by NRIs without repatriation benefits:
Tax benefits for NRI:
Portfolio Investment Scheme for NRI’s:
Remittance facilities for NRI’s/PIO’s:
Comparative chart on NRI/PIO/PIO card holders/OCI:

Time Zones

FAQs

Who is an NRI?
Indian citizen or a foreign citizen of Indian origin who stays abroad for employment/carrying on business or vocation or under circumstances indicating an intention for an uncertain duration of stay abroad is a NONRESIDENT INDIAN ( NRI ).
Those who stay abroad on business visit, medical treatment, study or such other purposes which do not indicate an intention to stay there for an indefinite period will not be considered as NRIs. Students who go abroad for studies with an intention to stay there for an uncertain period and who stayed abroad for more than 180 days in the preceding financial year will be treated as Non Resident Indians.
Who is an OCI?
Who is an PIO?
Why invest in India?
Who all can Invest?
What all types of inv can NRI /OCI / PIO dO in India?
How to Open a Trading Account
General Permission to NRI/PIO’s:
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