NRIs (Non-Resident Indians)—including students treated as NRIs under FEMA—can invest in India across several asset classes. Overall limits depend on the investment route: general FEMA rules for many products and the RBI’s Portfolio Investment Scheme (PIS) for equity delivery on exchanges.
Investment scope under FEMA
FEMA permits wide investment access when funds are routed via authorised banking channels.
- Unlimited investments allowed: Listed equity shares, mutual funds, corporate bonds and NCDs, real estate (excluding agricultural land), and IPOs/NCD offerings via NRO accounts.
- Mode of investment: Repatriable via NRE accounts; non‑repatriable via NRO accounts.
- Restrictions: No investments in PPF, NSC, or other small savings schemes designed for resident Indians.
Facilities for NRI students under FEMA
Students going abroad are treated as NRIs and receive the same account, remittance, and investment privileges.
- Remittance facility: Up to USD 1 million per financial year from NRE/NRO accounts (including proceeds of property sale, investments, or inherited/gifted assets).
- Account access: Open/operate NRE and NRO accounts; invest in mutual funds, bonds, and equities via these accounts.
- Loan/expense support: Use NRE/NRO funds to repay education loans in India; receive inward remittances from relatives for education/living expenses.
Portfolio Investment Scheme (PIS)
PIS allows NRIs to buy/sell shares and convertible debentures of Indian companies on recognised stock exchanges via a designated bank.
- Scope: Equity delivery only (no F&O, currency, commodities, or mutual funds).
- Repatriation: Investments via NRE PIS are repatriable; via NRO PIS are non‑repatriable.
- Segregation: Securities purchased under PIS must be sold through the PIS route; Non‑PIS and PIS cannot be interchanged.
Investment limits under PIS
RBI prescribes company‑level caps for NRI holdings under PIS.
| Limit type | Threshold | Notes |
|---|
| Individual NRI limit | Up to 5% of paid‑up capital/each debenture series | Per the listed Indian company |
| Aggregate NRI limit | Up to 10% of paid‑up capital/debenture value | All NRI holdings combined |
| Enhanced aggregate limit | Up to 24% | If approved by shareholders via a special resolution |
RBI monitoring of NRI/FPI holdings
RBI supervises foreign holding levels to prevent breaches of sectoral caps.
- Caution list: Triggered when the combined NRI/FPI holding nears the cap (within 2%); further purchases may need RBI approval.
- Ban list: When the cap is reached, fresh NRI/FPI purchases are disallowed under PIS.
Restrictions on transfer of PIS‑purchased shares
Shares acquired under PIS must be traded through stock exchanges; private/off‑market transfers are restricted.
- No private sale/transfer: Off‑market transfers are not permitted without RBI approval.
- Gifting exceptions: Possible to gift to specified relatives (Companies Act definition) or registered Indian charitable trusts; conditions/approvals may apply.
Always check RBI caution/ban lists before placing PIS trades, and ensure your account type (PIS vs Non‑PIS) matches the product segment. FYERS platforms surface these restrictions during order placement.
What if…
| Scenario | What you should know |
|---|
| You held a PPF before becoming an NRI | You may continue to hold it, but cannot extend or contribute further. |
| You wish to repatriate profits | Use an NRE route or follow RBI rules for repatriating NRO income. |
| You want to invest in IPOs as an NRI | Apply via your NRO account; UPI can be used for Debt IPOs or equity offerings (as permitted). |
| You buy shares on the RBI’s Ban List | The trade will be rejected or reversed; fresh buys are not allowed under PIS. |
| You transfer PIS shares privately | Off‑market transfers are prohibited without RBI approval. |
| You are an NRI student | You can invest via an NRO account, subject to FEMA rules; update your KYC and bank status when you move abroad. |
Last updated: 12 Aug 2025
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