How can NRIs from the United States invest in Mutual Funds in India?

Short Answer

NRIs living in the United States can invest in Indian Mutual Funds, but there are some hassles that have to be overcome. You will require an NRE, NRO, or FCRN account in order to convert the foreign currency into Indian rupees, post which you can complete the KYC and begin investing in Indian Mutual Funds.

Detailed Answer

International Investment options in India

Being an emerging market, India has lately received a lot of attention in its capital markets. Foreign investors and NRIs (Non-Resident of India) are flocking to Indian markets to get a better return on their money. For US residents, the Indian markets remain a good proposition for investment due to multiple factors like high growth in equity, currency depreciation return, etc.

Investment options for U.S based NRIs

NRIs have a wide range of investment options through which they can invest in India. Some of the commonly used investment tools are Fixed Deposits, National Pension Scheme, Direct Equity, Real Estate, Public Provident Fund, and Mutual Funds.

Mutual Funds is an ideal choice for moderate risk-taking investors as it offers higher returns than FDs and is less risky than direct equity. Let's look at how NRIs from the US can invest in Mutual Funds in India.

How can NRIs invest in Mutual Funds in India?

Mutual Funds are professionally managed portfolio of assets that allows diversification under the same asset class. Mutual funds are less riskier compared to individual stocks because the overall risk is divided into multiple stocks in the fund.

In order to invest in Mutual Funds, NRIs have to follow certain steps in order to begin investing in Indian Mutual Funds.

Firstly you need to have a combination of accounts with an Indian bank. This account includes an NRE, NRO, and FCNR account.

1. NRE Account: A NRE (Non-Resident External) account is a form of savings, current, or fixed/recurring deposit account where you can deposit foreign currency in order to buy securities.

2. NRO Account: The NRO (Non-Resident Ordinary) account allows the foreign currency to be converted into Indian rupees after it gets deposited in the account.

3. FCRN Account: Lastly an FCRN or Foreign Currency Non-Repatriable account where an NRI can transfer a total of six foreign currencies to fund a broker or AMC (Asset Management Company) that allows US investors to invest in Indian markets.

After you have all these accounts, you can complete the mandatory KYC (Know Your Customer) procedure by submitting certain documents as required by the SEBI to the respective authority. Some of the important documents are:

  • Copy of Passport
  • Overseas Address proof
  • Indian address proof
  • Recent Photograph.

After providing these documents, you might have to visit the AMC for an IPV (In-Person Verification).

NRI Investors from the US or Canada can have to furnish some additional documents due to the FATCA (Foreign Account Tax Compliance Act) guidelines and abide by the FEMA(Foreign Exchange Management Act) regulations. Under this act, the fund house requires to share all the financial transitions of NRI and US citizens with the U.S government.

Here is a list of the Mutual Fund houses that accept investments from NRIs

  • ICICI Prudential Mutual Fund
  • HDFC Mutual Fund
  • Birla Sun Life Mutual Fund
  • SBI Mutual Fund
  • UTI Mutual Fund
  • PPFAS Mutual Fund
  • L&T Mutual Fund, etc.


To conclude, any NRI staying in the US can invest in Indian Mutual Funds easily only by completing certain documentation and abiding by certain tax-related laws. Once your application is approved by the AMC, there are a plethora of options to choose from. On the other hand, you will also from the rupee depreciation, and you will be taxed based on your holding period (Short or Long term Capital Gains Tax).

Tagged With: international investingnon resident of indiamutual fundsindian stock marketequity investng
Categories: Mutual Funds
Ask your query and our expert community would be happy to help
Discussion (0)
Related FAQs

Are market highs good to invest in Equity mutual funds?

Understanding the relative position of the market, the absolute values do not matter much. What matters is what is the earnings multiple, currently the market is trading at, popularly captured by a metric called P/E ( Price to earnings).

Can NRIs invest in mutual funds in India?

Yes, any NRI can invest in mutual funds in India, if they follow some certain conditions under Foreign Exchange Management Act or FEMA Act 1999.

Can NRI invest in Indian stock market?

Yes, NRIs can invest in Indian stock market. It is essential for the individual to check if he is considered as NRI or not according to the norms of the government. If yes, only then he can invest. There are also certain rules and regulations that must be followed.

Is Groww App Safe for Mutual fund and Stock Investing?

Yes, Groww app is completely safe for mutual fund, stock investing and trading. As a popular mutual fund investment plaftorm, Groww established itself quite well in the past few years. Now, it has also enetered the stock broking space so it's really good to see new entrants amid existing top discount brokers in India.

Can I trade or invest Rs 100 in the share market of India?

You can definitely trade or invest Rs 100 in Indian stock markets. There are no monetary requirements to enter the stock market hence you can buy any share that is trading under Rs 100. Apart from direct stock investing/ trading, there are some indirect ways to own shares over Rs 100. This can be done through Mutual Funds.

Which is better investing in equity, mutual funds, or keeping money in banks?

Equity and mutual funds are perfect if you want to invest in companies while seeing your money grow in a short period. Moreover, the chances of compounding your investments are higher. But the risk associated is equally greater considering the growth of companies and their performance in offering returns. But then keeping money in the bank is the safest way to keep your earnings. But then, due to inflation and low returns on interest, that value of the money kept might be cut down drastically.

How to find good companies as there are many publicly listed companies in the Indian stock market?

To find good companies out of the thousand companies listen on the Indian stock exchange, you can filter stocks on the basis of certain parameters such as Market cap, Debt to Equity, Dividend payouts, Revenue and Profits growth, etc. You can easily use an online stock screener to find out these stocks.

How to Invest in Index Funds in India?

There are several options to invest in index funds. It can be done through online portals, agents, demat account and AMC website.

How to get exposure in U.S stocks?

Investing in abroad markets has become quite easy these days. One can get direct and indirect exposure into the U.S. market through various methods. Investing in foreign markets like the U.S provides many benefits like Diversification into the top companies of the world, Benefit of Currency Depreciation, etc. Apart from directly purchasing the stocks listed on the U.S. stock exchanges, there are some different methods as well. Know the best methods of getting exposure to the U.S. stock markets.

How to choose stocks for long term investment in India?

There are various terms that play a huge role in determining how to choose stocks for long term investment such as P/E ratio, dividend consistency, etc. For a more elaborative information head below and read the explanation given for better understanding.