The laws for NRIs are all different from those of the residents of India. There are different norms for them for everything and this is what it goes their investment in India as well. Now coming to the investment of NRIs in India, then traditionally, NRIs have been more comfortable investing in real estate in India. Real estate investment gave returns in the country at an average of about 14-17% in this decade. Sensex returned 19% in the decade and top performing diversified equity mutual funds have given returns in the range of 25-30%.
Though past performance cannot be a pure indicator of future performance, but the pattern will stay true if the Indian economy grows in the 8-9% range in the next decade. So it makes good sense to get a life beyond real estate, so for the NRI’s investment on mutual fund is definitely a great aid. Now, coming to the point that whether the NRI’S can invest in Mutual fund then the answer to this goes on like this.
Non Residents Indians and Persons of Indian Origin can invest in mutual fund schemes in India. In case of NRIs no special approval is to be sought from authorities such as the RBI. They can invest in mutual funds on repatriable basis or non-repatriable basis. To invest on a repatriable basis you must have an NRE account or FCNR account with a bank in India. In this case the investment money should be remitted through usual banking channels or from the NRE/FCNR account of the NRI investor.
Investment can be made on a non-repatriation basis as well with investment funds being provided from NRO account or NRE/FCNR account of the investor. With the above discussion it is now clear that when the certain guidelines would be followed then the non-residents could also invest on the mutual funds and get benefitted by the same as well.