NRIs are investing more and more in the Indian stock market. They are buying shares of Indian company and form a major part of the country’s foreign direct investment (FDI). The NRIs should be aware of the limit of their investment, the risk involved, the expected return from the shares and the goals they have set for investing. The NRIs invest in equities and Mutual Funds, as they are the best way for an NRI to invest.

The mutual funds are managed by professionals who know the details of the funds so are dependable, while you cannot depend on the local brokers. They have to invest through the Portfolio Investment Scheme that allows the NRIs to acquire sharer or debentures of Indian companies or Mutual Funds (domestic) through the stock exchange(s) in India.

In order to invest so that money can be sent back to you, you should have an NRI or FCNR bank account in India. The mutual fund you are investing in, should comply with the terms and conditions fixed by SEBI. The amount you want to invest should be paid through normal banking channels or NRI Account/ FCNR account. The money can be repatriated on the condition that the net income or capital gains after tax arising out of investment is eligible for repatriation subject to regularity guidelines at the time of the repatriation. However, if the investment is made a non-repatriation investment, then only the net income can be sent

The NRIs can take loan against the stocks through authorized dealers who have their branches abroad. However, only those shares can be used as collateral that have the condition of repatriation in it. Generally permission is given for buying and selling shares for period of five years, but it can be extended by requesting the same. The policies of the Indian government have made it easy for the NRIs to invest in India.