Things NRIs Should Consider Before Investing In India (Part 1)

Before You Invest in India, Get These 5 Structural Decisions Right

India continues to attract NRI capital. Growth looks compelling, markets feel familiar, and investing back home feels natural.

But most NRIs jump straight to product selection — mutual funds, property, FDs — without resolving the structural questions beneath every investment decision.

These gaps quietly erode returns, create compliance stress, and complicate exits.

Here is what to resolve first.

1. Tax Residency Determines the Real Outcome

An NRI in Dubai and an NRI in the US are not in the same position.

A Dubai-based NRI pays no personal income tax locally. Indian capital gains and interest income may only face Indian tax, which can often be structured efficiently.

A US-based NRI faces a different reality. The US taxes global income. Indian mutual fund gains, FD interest, and property sale proceeds must be reported to the IRS. PFIC rules can make certain Indian mutual funds tax-inefficient. FBAR and FATCA add reporting layers.

The same Indian investment can produce very different after-tax results depending on residency.

What to do: Map your tax residency first and understand how India’s DTAA applies to the specific instruments you are considering.

2. NRE vs NRO Is a Capital Mobility Decision

Most NRIs have both accounts. Few understand the strategic difference.

NRE accounts hold foreign earnings converted to INR. Principal and interest are fully repatriable.

NRO accounts hold India-sourced income such as rent, dividends, and sale proceeds. Repatriation is capped at USD 1 million per financial year and requires Form 15CA, Form 15CB, and tax documentation.

Routing is decided when you fund the investment, not when you exit. Capital invested through NRO cannot later move as freely as capital routed through NRE.

What to do: Decide upfront which account will fund the investment and whether you may need to repatriate proceeds. Correcting a wrong routing decision later is often complex.

3. TDS Will Lock Your Cash Flow Before You See a Rupee

NRIs face higher TDS rates than residents across most asset classes.

NRO fixed deposit interest is taxed at 30% plus surcharge and cess at source — before you receive it. Property sales often attract TDS of 20% to 30% on the transaction value, not just the gain. Capital gains on equity and debt funds are also subject to TDS even when the final tax liability may be lower.

Refunds are possible, but only after filing an Indian tax return and waiting for processing. Until then, your capital remains locked.

What to do: For large transactions such as property sales, apply for a lower or nil TDS certificate under Section 197 before closing. Plan liquidity around TDS timelines, not just expected returns.

4. Currency Is a Hidden Return Variable

If you earn in USD or AED and invest in INR, your return has two components: investment performance and currency movement.

Over long periods, the INR has depreciated against the USD by roughly 3 to 4% annually. A 12% INR return may translate to 8 to 9% in USD terms after currency adjustment. That gap compounds over time.

Currency risk is embedded in every India allocation made by a foreign-currency earner.

What to do: Adjust return expectations for currency impact. For larger allocations, assess whether the India thesis justifies the currency drag.

5. Compliance Is Not a One-Time Event

Repatriation requires Form 15CA and, in most cases, Form 15CB certified by a chartered accountant. Banks verify documentation before processing transfers. Tax settlement may be required for larger amounts.

Beyond repatriation, NRIs may have Indian ITR filing obligations, foreign reporting requirements, and ongoing FEMA compliance.

A missed form or misclassified transaction can delay transfers or trigger notices.

What to do: Maintain a compliance calendar. Track Indian filing deadlines, repatriation documentation, and foreign reporting requirements. These obligations recur annually.

Key Takeaway

Most NRIs spend more time selecting investments than designing structure. The ratio should be reversed.

Tax residency, account routing, TDS planning, currency exposure, and compliance influence real outcomes more than product choice.

Get the structure right before investing. It reduces friction, protects liquidity, and simplifies exits when they matter most.

How Pivot Money Helps

Most NRIs don’t just have an investing problem. They have a structural problem.

Wrong account routing. No succession clarity. TDS shocks at exit. Compliance gaps across jurisdictions. Products chosen without understanding the framework underneath.

Pivot Money is built to fix this.

We make you investment-ready from anywhere in the world. No travel. No physical paperwork. Fully digital KYC and KRA registration designed for NRIs who want to invest in India without friction.

We show you the full picture before giving advice. Through Account Aggregator and MF Central integration, we consolidate your existing India assets so you see everything in one place before deploying capital.

We advise before we distribute. As a SEBI Registered Investment Advisor, our starting point is your tax residency, account structure, repatriation needs, and family context — not recent fund performance.

We build for transmission, not just accumulation. With an Anyone or Survivor holding structure, your investments don’t freeze if something happens. Your family gets access without probate delays or unnecessary legal complexity.

We never hold your money. Capital moves directly between your bank and the AMC. Pivot Money has zero custody — a deliberate trust decision.

For NRIs who want to invest in India with the right structure from day one, Pivot Money is built for that purpose.