Indian Equity markets have a peculiar characteristic that isn’t common to its international counterparts. It is the fact that Foreign Institutional Investors (FIIs) play a major role in the India markets. Their net inflows and outflows have the potential to determine the overall movement of the market.

Have you ever wondered, why do FIIs focus so much on the Indian equity market?

Before I answer that, I would like NRIs to pay special attention to this. NRIs can relate to FIIs because the only difference is that of scale.

Why should NRIs invest in India:

– India is still a developing economy
– It is among the fastest growing economies in the world, add to that the presence of a stable democracy, its huge potential and its international geo-political and economic relations, India is a great country to invest in
– Covid has highlighted the problems with world’s supply chain management and its over dependence on China, therefore, India has emerged as a major alternative that can help the world diversify its supply chain issues
– India is expected to drive the global economic engine in 21^st century

When interest rates are at historic lows, it is very evident that NRIs can generate better returns when investing in India. However, investing in India for NRIs is a little complicated in comparison to investing as an Indian Citizen.

But sweat not, because we are here to help. We have adequate experience and can help in accelerating your growth.

To answer some common questions:

How can NRIs invest in Indian Stock Market?

Portfolio Investment (NRI) Scheme (PINS) Account is Mandatory for NRIs and PIOs for dealing with shares, debentures and MFs in the Secondary Market. Only one PINS account [One NRE (PIS) account for investment on repatriation basis and one NRO(PIS) account for investment on non-repatriation basis] can be active at a given point of time.

Accordingly, one can have 2 different demat accounts (linked with NRE PIS and NRO PIS) to invest funds on the basis of their origin and their repatriation.

Transactions permitted under PIS:
– Purchase of shares in the Indian companies through Stock Exchanges as an NRI
– Sale of shares, which were bought under PIS
– Shares received under corporate actions such as stock split.

Transaction permitted under Non-PIS:
– Mutual Funds and IPOs
– Sale of shares, which were, acquired other than under PIS

A few examples are:
– Shares acquired through IPOs/Right Issues/ ESOP
– Gifts from relatives or otherwise
– Shares bought as resident Indian
– Shares received in bonus
– Shares acquired through NRO account via non-PIS route

Special considerations in case of NRI trading accounts:

– NRIs cannot trade in securities in the breach list (Companies where foreign investment has reached permissible limit for FPI/NRI/Overall Sectoral Limit)

– Clear funds should be available for purchases (NO MARGIN)

– Securities should be available before making a sell order (NO SHORT SELLING)

– Depending upon whether the purchases are made on repat/non-repat basis, pay-out of the securities is transferred to the respective demat account.

– Purchase/Sale transactions in cash segment are settled by delivery only.

– The contract notes in original have to be submitted to the designated branch where the investor holds the PIS account within the time specified.

NRIs can’t invest in:

• PPF
• NSC
• Senior citizen saving scheme
• KVP
• Small saving schemes of PO
• SGBs

Note: However, for PPF, NSC and SGB, if a resident becomes NRI during the prescribed term, he/she may continue to subscribe till maturity on NON-REPATRIABLE basis.