How NRIs Can Start Investing in India in 2025

NRI Investment has categorically been on rise by 23% in 2025. The total deposits increased to $160.33 in Feb 2025. The reason for this sparkling growth can be attributed to factors like better fundamentals, strong GDP, good economic outlook, strong demand for domestic consumption and investment, and rising employment supported by customer sentiment. However, the question remains: how can NRIs start investing in the stock market in 2025.

NRI Investment Basics in India

Step 1: Open an NRI Bank Account

NRIs can open two kinds of bank accounts depending on their financial objectives and planning

NRE- Popularly called a Non-Resident External Account. This account allows the investor to deposit their foreign earnings, which can be converted to Indian rupees. Its main features are-

1. You can send principal and interest amount through this account

2. The interest earned is not taxable.

3. The foreign currency that you deposit here can be easily converted to Indian Rupee.

4. Perfect for individuals who want to keep their savings in India.

5. You can use it to invest in mutual funds,the stock market, real estate, etc. 

6. Joint accounts with other NRIs are permitted

NRO- Non-Resident Ordinary account. This account is similar to NRE, with the difference that NRE allows restriction-free transmission of amounts to NRI resident countries; however, an NRO account comes with certain limitations. You are not allowed to repatriate or transfer more than $1 million in a year, and the amount should be earned in India. Taxes and paperwork are involved for easy transition. Its key features are

1. Interest income earned in India is taxable.

2. Funds can be transferred to foreign locations with a cap of $1 million per financial year.

3. Indian residents can hold joint accounts

4. This account can be used to manage the savings that come from rental property income in India and to re-invest in the Indian stock market.

Let’s evaluate the key differences between both accounts-

Step 2: Get Permission from RBI

Investment in the Indian stock market by NRIs requires due permission from the RBI. The Portfolio Investment Scheme lets the investor invest in Indian equities, mutual funds, and securities that are being traded on NSE and BSE. To be eligible for the same-

1- Investors have to get regulatory approval from the RBI.

2- Open a PIS NRE/NRO account for fund transfer

3- Comply with taxation reports.

It is in their best interest that NRI investors engage with the registered stock broker in India to execute the transactions seamlessly. 

Step 3: Begin a Demat Account

Having a demat account is essential to make NRI investments. You can open one from any SEBI-registered broker and couple it with the necessary documents like a PAN card, address proof, and KYC documents for regulatory compliance. Once all the necessary formalities are done, you can begin your investment journey. 

Where NRIs can invest in:

1. Mutual Funds

2. Equity

3. Real Estate

4. Public Provident Fund

5. Equity

6. Fixed Deposits 

7. Startup Equity

8. Portfolio Management Services

Step 4: Be Aware of Taxation Rules 

Investments in NRE are not subject to taxation. And, capital gains earned through the investments using the NRE account will be tax-exempt depending on the period of the asset that you hold. On the other hand, capital gains earned through NRO accounts are taxable plus TDS deductions.

 

Let’s evaluate it further with this table-

NRI Taxation 

This is a common outline on how NRI can start investing in India. 

Points to Consider

Most fund houses in India restrict investments from NRIs from the USA and Canada because of overwhelming compliance requirements. However, some permit it; ask your mutual fund partner or stock broker about it.

The process of investing is simple and straightforward for NRIs. They need to adhere to the country's KYC regulations and begin their investment journey with confidence. However, navigating through all these steps could be easier if you find a trusted stock broker in India like Sykes & Ray Equities. They will make your trade journey confident and compliance-free.