Who is NRI?

A NRI is an abbreviation for ‘Non-Resident Indian’, termed as a "person resident outside India". NRI falls into three broad categories as per formal definitions. The first type NRI can be any Indian national not residing in India because of employment or business purpose but holding Indian Passport. The second type of NRI is also called PIO or ‘Person of Indian Origin’. PIO is a foreign national considered of Indian origin by virtue of ever holding Indian passport, or belonging to Indian origin through either of his/ her parents or grand parents, or being spouse to either of the two aforesaid PIO types or an Indian citizen. The third type of NRI is also called OCB or ‘Overseas Corporate Business’. OCB are corporate entities owned, directly or indirectly, by either or both of the two aforesaid NRI, to the extent of at least 60%.

Facilities / provisions available to NRI in India

The Government of India is particularly liberal in respect of investments from NRI and OCB. In order to facilitate investments, they enjoy the liberty to open and maintain NRI-specific bank accounts as well as invest in shares & securities of Indian companies via either RBI or FIPB, including permission to invest up to 100% equity in real estate development activity and civil aviation sectors. Further, the investments made by the NRIs and OCBs, are fully repatriable, except in the case of real estate, which has a 3 year lock-in period on original investment and, 16% cap on dividend repatriation. For those proposals that do not qualify under the automatic route, Government approval is granted through FIPB. Banks authorized by the Reserve Bank of India maintain accounts in the names of NRIs/OCBs. There are two categories to the type of accounts offered to NRIs, i.e., Rupee Accounts (NRO A/C and NRE A/C) and Foreign currency accounts (FCNR A/C and RFC A/C).