Everything You Need To Know About Investment Plans For NRI

The rapidly developing economy of India can translate into higher returns for investors living abroad. The fast-paced financial growth in India gives Non-Resident Indians (NRI) an opportunity to leverage higher interest rates, significant market returns, and lower tax* obligations as opposed to their counterparts in developed countries. This article explains everything you need to know about investment plans for NRIs.

Understanding investing in India

Let’s understand what is investment plan for NRIs. In the event that an NRI wishes to invest his money in his motherland, it is important to understand how the financial system works in India. The country offers a wide range of investment options classified into different levels of risk and returns.

Due to the increasing financial inclusion and the expansion of the economy, returns in India tend to be usually higher than those abroad, giving NRI investors the opportunity to remain a part of the nation’s growth even while residing in a foreign country. A number of good investment options for NRI investors are available to help promote the inclusion of non-residents into the national economy.

Investments options in India

Being a developing country, India has many lucrative investment options for the residents, along with the NRIs. NRI investors can explore the following options to invest their money when looking for opportunities to benefit from the returns in their home country.

1. Real Estate

Real estate is one of the safest investments to make in the country. The rising population and rapid urbanisation have made property a highly sought-after asset, not only for housing purposes but also as an investment. The ever-increasing demand for real estate owing to the scarcity of land is an important factor when considering investing in property. Historical returns over the long term in the real estate market have been good and reliable. 
 

2. Securities

The stock market has remained on an uptrend for the most part of its existence. The growing economy of India gives the equity market a large room for growth and has led the stock market to outperform every asset class in the last three decades repeatedly. The securities market is comprised of volatile investments and must be approached after comprehensive market analysis in order to avoid incurring losses.
 

 3. Mutual Funds

Mutual funds are market-linked investments that are designed to invest in multiple assets at different levels of risk. This is done through a reservoir of investments generated from multiple investors that receive fractional ownership of a diverse portfolio. Mutual funds are a lucrative opportunity for NRI investors looking for moderate-risk investments, with the added advantage of a pre-planned, diverse portfolio integrated into the investment.

NRI investors can also explore exchange-traded funds, or ETFs, which are similar to active mutual funds in their composition. However, they tend to replicate the benchmark indices, and thus returns are linked to the return of the underlying benchmark, like NIFTY50 or BSE30.
 

4. Unit-Linked Insurance Plans

A ULIP plan is another market-linked investment opportunity offering returns on money invested as a premium with the added benefit of combining life insurance with wealth-oriented investing. ULIP returns are at par with mutual funds and stocks while providing tax* benefits to the extent of premiums paid towards the ULIP insurance as well as the returns received upon the maturity of the policy (subject to certain conditions).

NRI investors interested in investment opportunities coupled with life cover can explore different options from Tata AIA Life Insurance.
 

5. Government Securities

G-Secs are instruments issued by the government in the form of treasury bills or bonds, offering low-risk and government-backed investment opportunities to investors looking to park their money in an investment that grows over time without risking the corpus of the investor.

Government securities are risk-free options offering fixed and floating interest rates to investors with the flexibility of being traded in the market.
 

6. Fixed Deposits

Fixed deposits in scheduled banks are one of the safest forms of investments offered in India. They are low-risk, low-return options that can help build a corpus over time through long-term compounding. Non-resident Indians can invest in fixed deposits with banks and corporations through a Non-Resident External Account (NRE), Non-Resident Ordinary (NRO) or a Foreign Currency Non-Resident Account (FCNR).

Fixed deposit rates in India are among the highest in the world; therefore, a term deposit with a financial or commercial institution in the country is a great investment opportunity for investors looking to develop a savings portfolio with low-risk exposure.

What are the benefits of NRI investment?

The benefits of investment plan for NRIs are as follows:
 

Diversifying portfolio

Diversifying investments across regions and currencies helps reduce overall risk. By investing in Indian assets, NRIs gain exposure to INR-based returns alongside foreign currency investments. A mix of Indian equities, bonds, and insurance products, combined with overseas assets, can help maintain balance across economic cycles.
 

Family security

For NRIs with dependents in India, financial protection is a key consideration. Products like term insurance and pension plans help manage financial needs in case of unforeseen events. These options provide income support and planned payouts, helping families manage expenses without disruption.
 

India’s growing economy and investment scope

India’s economy is expanding at a steady pace. As per a Morgan Stanley report, India is projected to become the world’s third-largest economy by 2028, with a GDP of USD 10.6 trillion. This growth opens up multiple investment avenues for NRIs, including equities, infrastructure, and digital sectors. By investing in India, NRIs can align their portfolios with the country’s long-term economic growth. A rising domestic consumption base further supports long-term wealth creation.
 

Retirement funds

Indian retirement-focused products such as the National Pension Scheme (NPS), annuity plans, and retirement savings plans can support long-term retirement planning. These instruments allow managing living expenses after retirement in India in rupees. Such investments can help build a retirement corpus that suits future financial needs.
 

Potential returns

India offers comparatively higher returns than many developed economies. Investment options such as equity mutual funds, bonds, IPOs, and fixed deposits generally provide better yield potential. These returns are backed by economic stability and regulatory oversight aimed at safeguarding investors. However, higher returns may involve higher risk. NRIs should choose instruments based on their financial goals and risk tolerance.
 

Tax benefit

Tax considerations play a role in NRI investment decisions. The tax* deduction depends on the investment type and the country of residence. India’s Double Taxation Avoidance Agreement (DTAA), covered under Sections 90, 90A, and 91 of the Income Tax Act, 1961, helps avoid taxation of the same income in two countries.