I’m an NRI. How should I Invest in Indian Stocks?
Over the past few months, the interest in the Indian stock market, especially among NRI’s, has picked up. After all, rupee has depreciated against all the major currencies in 2013. To attract foreign currency, RBI has deregulated interest rates on NRI deposits. In response to which, banks have raised NRI deposit rates. So, if you’re an NRI investor looking to invest in Indian Stocks, having no clue about where to start, read on.
But, before we proceed further, let’s have a clear understanding as to who is considered an NRI, according to the Foreign Exchange Management Act (FEMA) 1999.
An individual is treated as a Resident in India in any previous year, if he/she was in India:
- for at least 182 days in that year or
- for at least 365 days during a period of 4 years, preceding that year and at least 60 days in that year.
Any individual, who does not satisfy the both above mentioned conditions, will be treated as ‘non-resident’ in that previous year.
Here is a quick procedural guide on the steps NRI’s need to follow for investing in stocks.
Step #1: Open an NRE Account
An NRI can open an NRE (Non-Resident External) account, which enables you to invest in Indian stocks in the secondary market. An NRI also needs approval under the PIS (Portfolio Investment Scheme) by the RBI, which allows one to invest in the Indian stock market. A sizeable benefit that an NRE account offers is the allowance to repatriate their earnings to their country of residence.
Continue reading here…
