NRI Corner

The Indian real estate sector plays a significant role in the country’s economy, as it is on the second position in terms to agriculture, in terms of employment generation and contributes heavily towards the Gross Domestic Product (GDP). Almost five to six percent of the country’s GDP is contributed to by the housing sector and in the next five years, this contribution to the GDP is expected to rise further.

There are various developments and elevations which are taking place in the real estate sector with more number of apartments in India and owing to this, it is growing at a fast pace. Almost all the unused space in Tier I cities has been utilized which limits further customization. This strikingly highlights the importance of land usage in Tier II cities. Hero Homes’ initiative is helping to develop the Tier II property markets focusing on better innovation in construction and services. In India, Tier II cities such as Mohali, Ludhiana, Surat, Nagpur, Vadodara, Indore and more are prone to grow much better. Tier II cities are the key for smart futuristic development. The realtors have portrayed the property investment as an element of lifestyle resulting in a splurge of luxurious apartments with beautiful commercial complexes and extraordinary retail ventures. There are two different angles of looking at the property investment in India. First is the ROI (Return on Investment); and the second is location & the surrounding environment. Due to these factors there has beenan increase in the number of NRI property buyers in Tier II cities who are planning to reconnect with their roots and experience the wealth of Indian culture and traditions by settling down and investing in real estate.



According to the Foreign Exchange Management Act (FEMA) of 1999, an Indian Citizen who stays abroad for employment/business or stays outside the country for an indefinite period of time is considered to be an NRI. (Persons Posted in U.N. organizations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as nonresidents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs).

A Person of Indian Origin (PIO) is whose ancestors were born in India and he/she has an Indian ancestry but not an Indian citizenship. As per the FEMA of 1999, a person of Indian origin can avail bank accounts, invest in shares and securities in India. So, he or she

  • Has had Indian Passport at any time
  • Himself/herself, parents or grandparents were Indian citizens (of the Constitution of India or Citizenship Act, 1955 (57 of 1955)
  • Is a spouse of an Indian citizen or a person who held an Indian Passport at any time
  • Is a spouse of a person who either was a citizen of India or his parents or grandparents were a citizen of India

Under the Foreigners Act of 1946 a foreigner means a person who is not a citizen of India.

Owning a property in India is one of the greatest assets and is one of the most profitable investments. There are very less chances of a loss, as the real estate growth graph is escalating day by day.

The constant expansion of the IT sectors; MNC and corporate firms have given way for the growth of the real-estate sector particularly in the commercial sectors. Financial support from the Indian government in regards to revised FDI policies, easy access to bank loans & growth in Indian economy has resulted in the arrival of foreign investors in the Indian real estate market. Real estate in India creates huge returns and most NRIs are making a huge profit out of it.

Yes, in the past few years, the government of India has adopted a new stand regarding the foreign direct investment (FDI) policies which has encouraged other countries to invest in Indian properties. The country has attracted three times the foreign investment in the past few years towards real estate due to rapid growth in the commercial, residential and retail sectors of India in metro cities like Mumbai, Delhi, NCR, Bangalore and Chennai.

According to the RBI guide lines, an NRI/PIO can acquire a residential property in India by a way of gift from an Indian, or purchase it. He or she can even acquire residential property by way of inheritance from a person who is a resident of India as stated in the FEMA, 1999.

For NRI/PIO there are no restrictions and no approval is required from RBI on purchase of residential or commercial property in India. Although, in case of PIO, form IPI-7 might be required to be submitted with RBI within 90 days of purchase.

For a foreigner, RBI approval is required.

Under the general permission, an NRI/PIO may purchase a residential property in India by funds remitted to India through normal banking channel or funds held in his/her NRE/FCNR or NRO accounts.

For foreigners, only direct remittance is applicable.

In accordance to RBI guidelines, an NRI/PIO can also apply for property loans against NRE/ FCNR deposits for residential property only. Repayment of the loan should be made within a period not exceeding 15 years. Although, you might need a guarantor for a loan mainly for collateral security. The guarantor will have to demonstrate appropriate net worth to cover for the loan. Usually one can have a guarantor in any city where the loan issuer has a branch. The best way is to talk to loan issuers as they may work something out for NRIs/PIOs.

RBI permits NRIs/PIOs to rent their property in India. The rental income of any such investment is eligible for repatriation.

Although, foreigners may require RBI approval.

As an NRI you can easily sell your property in India to an Indian resident/NRI/PIO. Although, as a PIO you can only sell your residential property in India to an Indian citizen. In accordance to RBI guidelines NRI/PIO can also transfer the property as a gift to an Indian resident/NRI/PIO.

Repatriation outside India means buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency.

NRIs/PIOs are eligible to repatriate sale proceeds outside India, provided that the proceeds are equivalent to the original investment. In the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties, as well as commercial property after 3 years of acquisition (i.e. possession) or payment of last instalment, whichever is later , provided the investment is out of direct remittance or NRE/FCNR account. Form IPI-8 is to be submitted to RBI within 90 days of sale of the property.

NRI/PIO are allowed by the authorised dealers to repatriate an amount up to $(US)1 million per financial year. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $1,000,000 in any financial year requires prior permission of the RBI.

Foreigners are not eligible to repatriate sale proceeds outside India.


Here is a summary of some important facts for you:

Non Resident Indian(NRI): No RBI approval required.
Foreign citizen of Indian origin: No prior RBI approval only intimation to RBI in Form IPI-7 within 90 days of purchase (Press Release dated 8/1/1992).
Non-Citizens of Foreign Origin i.e. Foreigners: RBI approval required (Circular dated 23/3/1992.
Non Resident Indian(NRI): No RBI approval required.
Foreign citizen of Indian origin: No RBI approval required Intimation to RBI in Form IPI-7 within 90 days of purchase (08/06/93 Circular).
Non-Citizens of Foreign Origin i.e. Foreigners: RBI approval required.
Non Resident Indian(NRI):
  1. Direct Remittance NRO/ NRE A/c
  2. Loans against NRE/FCNR deposits for residential property only.
Foreign citizen of Indian origin:
  1. Out of NRE / FCNR a/c or Foreign remittance
  2. Loans against NRE/ FCNR Deposits for Residential House only
  3. With prior approval of RBI from NRO Account
Non-Citizens of Foreign Origin i.e. Foreigners: Direct remittance.
Non Resident Indian(NRI): No RBI approval required.
Foreign citizen of Indian origin: No RBI approval required.
Non-Citizens of Foreign Origin i.e. Foreigners: RBI approval required (circular dated 23/3/1992).
Non Resident Indian(NRI): Repatriation of sale Proceeds equivalent to the Original Investment is permitted for a maximum of two houses as well as Commercial Property after 3 years of acquisition (i.e. possession) or payment of last instalment, whichever is later , provided the investment is out of direct remittance or NRE/FCNR account. Form IPI 8 to be submitted to RBI within 90 days of sale of the property.
Foreign citizen of Indian origin: Repatriation of sale Proceeds equivalent to the Original Investment is permitted for a maximum of two houses as well as Commercial Property after 3 years of acquisition (i.e. possession) or payment of last instalment, whichever is later, provided the investment is out of direct remittance or NRE / FCNR account. Form IPI 8 to be submitted to RBI within 90 days of sale of the property.
Non-Citizens of Foreign Origin i.e. Foreigners: Non Repatriable.