How NRI’s can start investing in India? | How Non Resident Indians Start Investing India

An NRI, who wishes to trade in the F&O segment of the exchange, is required to approach the exchange through a clearing member, through whom the NRI would like to clear his trades for allotment of custodial participant (CP) code.

A savings bank account is the basic requirement for NRI’s to invest in India. There are two types of income sources for NRIs:

Income from India: Non-Resident Ordinary (NRO)

Income out of India: Non-Resident External (NRE)

NRIs can have the following two types of bank accounts from where they can make investments in India:

1) Non-Resident Ordinary (NRO) Bank account

NRO savings account is where you manage your income earned in India. If you are not having any income source in India there is no need to open NRO bank account in India. Funds in NRO account can be repatriated, up to USD one million per financial year, for all bonafide purposes. However, if your status is changes from Resident Indian to Non-Resident Indian, we suggest you to change your status and convert your status in all your existing bank/demat/mutual fund accounts from resident to NRO category. You can make investment in below products from NRO income source:

• Primark market transaction - IPO/FPO/Rights:
• Mutual fund investments
• Secondary market transaction - Trades in SEBI registered stock exchanges in India
• Portfolio management services (PMS)
• Derivative trading - Futures and Options with Custodian Participant (CP)*code
• Bonds
• Alternative Investment Funds (AIF)

What is Custodian Participant (CP) code?

An NRI, who wishes to trade in the F&O segment of the exchange, is required to approach the exchange through a clearing member, through whom the NRI would like to clear his trades for allotment of custodial participant (CP) code. Clearing corporation would assign a CP code to each NRI, based on the application received from the clearing member of the NRI.

2) Non-Resident External (NRE) Bank account

NRE account is a savings account maintained in Indian Rupees, where you can remit your foreign income earned outside India. Interest earned is not taxable in India. Funds in NRE account are fully & freely repatriable.

You can make investment in below products from NRE income source

• Primark market transaction - IPO/FPO/Rights
• Mutual fund investments
• Portfolio management services (PMS)
• Bonds
• Alternative Investment Funds (AIF)
• Secondary market transaction - Trades in SEBI registered stock exchanges with PIS Bank Account in India

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