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India is the fourth preferred destination for FDI just after the United States, China and Britain. Government offers several facilities to Non Resident Indians (NRIs) to attract foreign investment in India. NRIs are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, NRIs can acquire shares/debentures of Indian companies with the help of stock exchanges in India. The growth of nation comprises of various amendments of acts and policies, investment favorable taxation and other documentation process for starting a company, availability of human resources, etc. All these factors attract NRIs investment in India. The two most attractive features of the Indian market are high potential of the domestic market driven by an emerging middle class and cost competitiveness. Investment Options The RBI allows Non Resident Indians to hold accounts in Indian banks as business investors in India. There are different types of saving and deposit investment schemes based on the type of account. Joint holding is also allowed in these accounts subject to certain limitations. This can be a good investment option for NRIs who have parents or blood relatives in India. RBI has also granted general permission for NRIs investment in India, who are willing to invest money in shares of growing companies in India. They have an option to invest in mutual funds, fixed deposits, shares and debentures of companies, etc. The limit of investment, type of company and few other factors are subject to regulations of RBI and SEBI. The NRIs are also allowed to invest in Government securities and National Savings Certificate. They can also convert their money into property (except the agricultural land), so that it remains as a security on long term basis while the value of the investment grows with time. Benefits for NRI Investors: - Taxation policy in India has been changed to favor NRIs to invest in India
- Various provisions have been made to benefit NRIs
- Loans are provided to NRI against deposit schemes to construct homes in India
- With advancement in technology, mode of transaction has leaped a step ahead through demat accounts, internet banking facility etc.
Major Points for Investment:- NRIs can directly invest in the Indian companies equity market using their own demat account or broker account.
- They can deal with only one bank at a time.
- NRIs can trade only in delivery-based transactions. Intraday trading (buy and sell on the same day) is not allowed for them.
- They will be allowed to invest only up to 5 % of the paid up capital of the company.
- NRIs need to have 100% funds at the time of buying. No exposure is given to NRIs.
- They need to have 100% stock available to them while selling. No short selling allowed.
It is very important to choose the best broker for NRIs investments in India. So that, all the NRI services that are to be availed are of high quality.About the Author: Harjeet is an Indian - born mass-market novelist, who covers the world internet related topics . He writes columns and articles for various websites and internet journals in the domain of Investments.
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business investors in India, NRIs Investment in India, Investment Options in India, NRIs, non resident Indians, FDI, foreign direct investmnet,
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