Under India’s FDI policy, Non-Resident Indians (NRIs) have been permitted to invest in India both on a repatriable and non-repatriable basis, subject to certain conditions. For the purpose of investments in India, NRIs have been categorized as a separate category of investors.
- NRIs are permitted to trade on stock exchanges in India.
- NRIs are permitted to invest in partnership firms and sole proprietorships, subject to certain terms and conditions.
- Sectoral caps are higher for NRIs in sectors such as air transport activities, some services under civil aviation sector and construction development.
- They are prohibited from purchasing shares/convertible debentures of companies engaged in the business of Chit Fund, Nidhi Company or company engaged in agricultural/plantation activities or real estate business or construction of farm houses or dealing in Transfer of Development Rights.
- No limitation for purchase of shares/convertible debentures of Indian companies whether by public issue or private placement, on non-repatriation basis.
- Consideration for purchase of shares/convertible debentures shall be paid by way of inward remittance through normal banking channels from abroad or out of funds held in bank account maintained with an Authorized Dealer or with an authorized bank of India, as the case may be.
- Proceeds of sale or redemption under this scheme shall be credited only to Non-Resident Special Rupee account or Non-Resident Ordinary account.