You might be living thousands of miles away — working late in Singapore, managing meetings in London, or catching up with family in Dubai — but your connection with India never really fades, does it? You still follow the markets, check the rupee’s movement, and wonder how your friends back home are making smart gains from their investments. So naturally, the question comes up: can you invest in India while living abroad?
Absolutely. And it all begins with demat account opening — your digital key to India’s financial world.
Think of a demat account as your investment locker back home. It holds all your shares, bonds, mutual funds, and ETFs safely in electronic form. No paperwork, no physical certificates, just a smooth online process that lets you participate in India’s growth story — even if your current view is of the Thames, not the Ganges.
So, let us sit down, coffee in hand, and walk you through everything you need to know about investing in India as an NRI.
Why you should consider investing in India
The growth story in India is hard to ignore. The economy is alive and well, the equity market is making record highs, and the startup ecosystem is changing norms globally. And for Indians living abroad, this is not just about investing — this is about staying connected to something that is growing faster than anything else.
Many NRIs are returning to Indian investments because of the strong fundamentals, transparent regulations, and increasing ease of digital access. Plus, it is reassuring to invest in a market you understand — one that feels like home.
With all this opportunity comes flexibility too. From equities to fixed income products, India offers a wide range of investment options. And yes, facilities like margin trading (depending on your broker and regulations) have made active portfolio management more dynamic for those who like to stay hands-on.
But first things first — before you think about trading or strategies, you need to open that demat account.
Understanding your demat account as an NRI
Here is the deal: an NRI demat account works almost exactly like a resident account — but with one key difference. The money that flows in and out has to follow India’s foreign exchange laws (FEMA rules).
When you open a demat account, it connects to one of India’s two main depositories — NSDL or CDSL. This is where your securities are stored digitally. You can trade through any SEBI-registered broker who supports NRI accounts.
You will have two main options when setting it up:
- Repatriable demat account (linked to an NRE account) – You can invest using funds transferred from abroad, and repatriate both your principal and profits back to your overseas bank account.
- Non-repatriable demat account (linked to an NRO account) – This is for investments made with income earned in India, such as rent, dividends, or savings. The repatriation limit here is restricted.
If your goal is to invest your foreign income and move your returns back overseas, the repatriable option makes more sense. But if you want to reinvest your Indian income, go for the non-repatriable route.
How to open a demat account as an NRI
Let’s make the process of opening a demat account easier. Although it may seem challenging right now, once you learn all the necessary steps, it could be a straightforward experience.
- Choose your broker or depository participant (DP)
Your broker should have a dedicated NRI practice. You’d want a broker that has simplified their paperwork and is clear on PIS (Portfolio Investment Scheme) rules.
- Open your NRE/NRO bank account
You’ll need one of these before you open your demat account: this is to confirm your funds are in compliance with FEMA rules.
- Get a Portfolio Investment Scheme (PIS) approval
The Reserve bank of India (RBI) mandates that NRIs obtain PIS approvals before investing in Indian equities. Don’t worry, though, you bank usually will help you with PIS paperwork you are required to complete.
- Documents to submit when opening a demat account
You will want to have the following documents ready:
- A copy of your passport and visa
- Overseas and Indian address proof
- PAN card (required)
- A couple passport-sized pictures
When you submit your documents, wait for your account to be verified and activated.
Once your account is verified, you can invest in Indian equities, mutual funds, ETFs and bonds from wherever you are.
Usually, it takes a few days to be approve. Then, you will be be ready to go.
What you can invest in as an NRI
The good thing is that you have many options. After your demat account is up and running, you can invest in:
– Stocks – Buy and hold shares in companies listed on Indian exchanges.
– Mutual Funds – This can be done easily without PIS approval.
– Bonds and Government Securities – These investments are good for those who want consistent, lower-risk returns.
– Exchange Traded-Funds, or ETFs – These are easily manageable, and great as a diversified investment.
Lastly, margin trading and derivatives – There are generally limitations on these under Reserve Bank of India regulations, but there could still be limited exposure allowed under some brokers. If you are interested in trading actively, then it is best discussed directly with your broker.
Taxes: What you need to keep in mind
Understanding taxes can be a headache, especially when you are dealing with income from more than one country. But this is the simplified version:
- Capital gains tax:
- Short-term (held less than a year): taxed at 15%.
- Long-term (held longer than a year): taxed at 10% on gains above Rs. 1 lakh.
- TDS (Tax Deducted at Source):
- Brokers will automatically deduct TDS on your gains before they transfer the money to your bank account.
- Repatriation:
- Money from NRE accounts can be freely repatriated.
- Money from NRO accounts can be repatriated within set limits and allowances each year.
- Double taxation relief:
- If you are investing from a country that has a Double Taxation Avoidance Agreement (DTAA) with India, you can claim tax credits on your investment in order to avoid double taxing the same income.
Keeping your documents and tax records up to date will help compliance and repatriation process run smoothly.
Why opening a demat account in India makes sense for you
To be frank, investing in India is not merely an act of diligence. It’s an emotional act as well. For many NRIs, it is like rekindling the ties with your present and your lineage.
This is where it pays to open a demat account:
- You stay connected to India’s growth – You can be part of one of the fastest-growing economies in the world.
- You diversify your investments – Indian assets bring balance to your global portfolio.
- You have access to digital ease – You can track and manage everything online, anytime and everywhere.
- You get dividends and bonuses directly – No middlemen, charges or delays.
- You invest with comfort – Strong SEBI and RBI regulations protect your investments.
Common mistakes NRIs should avoid
Even experienced investors make small errors that lead to big hassles. Avoid these if you can:
- Using a resident demat account after moving abroad (it is against regulations).
- Forgetting to get PIS approval for equity trading.
- Mixing income sources between NRE and NRO accounts.
- Not updating KYC or PAN details after relocation.
- Ignoring RBI circulars and rule updates.
Stay informed — it will save you a lot of paperwork and stress later.
A few tips before you start
You do not need to rush into trading right after your demat account opening. Start small, learn the flow, and then scale up.
- Begin with mutual funds or ETFs to get comfortable.
- Choose a broker that offers responsive NRI support.
- Check conversion rates and fees before transferring funds.
- Review your portfolio regularly but do not overtrade.
- Focus on long-term wealth, not daily gains.
Remember, investing is not a race — it is a rhythm.
Final thoughts
If you’re an NRI who is considering investing in India, this is your time. The process of demat account opening may seem complex initially, but it is your gateway into one of the most exciting markets on Earth. After you set your account up, things get easier — from buying your first stock to tracking your portfolio online.
You aren’t just sending money home; you are creating something impactful at home. So go for it — speak to a trusted broker and start collecting the necessary documents for the first step of the process.
Because no matter where you are in life, when you invest in India, you haven’t really left. You’re still part of the story — just with a better view.
