How Can an NRI Invest in the Indian Stock Market?

Non-resident Indians or NRIs can trade or invest in securities listed on the Indian stock markets, such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE).

For investments in the Indian stock market, as an NRI investor, you need a Non-Resident External (NRE) account as per the Portfolio Investment Scheme (PIS). You can also use your Non-Resident Ordinary (NRO) account to route your market investments.

If you are an NRI and want to know more about how can an NRI invest in the Indian stock market, read this blog and learn about the investment options, tax implications and more. 

Different Methods for NRIs to Make Stock Market Investments in India in 2025

If you are curious about how can NRI invest in Indian stock market, you should know the methods to invest in the stock market in India. Here is a detailed breakdown of the investment methods:

Brokerage Firms

As an NRI, brokerage firms are an excellent option or method to start an investment. You can trade in securities of the Indian market via such a firm, once you meet their KYC requirement and other obligations. These firms provide investment options as per the RBI guidelines.

Designate a Mandate Holder

If you are one of the NRI investors, it is recommended to appoint an individual of your choice as a mandate holder. Such an individual will help manage your accounts, exchanges, transactions and other trading account-relevant activities.

Power of Attorney (POA)

Appointing a POA is another method for NRI investment. The person whom you choose as your POA will purchase and sell securities on your behalf. However, you must grant POA rights to an Indian resident, create the contract on stamp paper and notarise it.

What is the PIS Approval of the RBI?

Before learning more about how can an NRI invest in the Indian stock market, you should have a clear idea about the PIS. It is a bank account approved by the RBI that you can use to transact in the Indian securities market.

As an NRI investor, you can have only one RBI-approved bank for investments in the Indian stock market. You cannot use this account for other financial transactions except for trading.

What is a Repatriable and a Non-Repatriable Investment?

As an NRI, you have the option of trading via either a repatriable or a non-repatriable Demat account in the Indian stock market. Investments through reputable accounts allow you to transfer funds from India to foreign countries.

However, a non-repatriable account is the opposite of the former. It means that once invested in Indian securities, you cannot transfer funds outside India using a non-repatriable account.

What are the Options for a UK NRI Looking to Invest in India?

After understanding how NRI can invest in Indian share market, look at the options available for NRIs in the UK:

Equities

As per the RBI’s PIS scheme, if you are an NRI and living in the UK, you can invest in equities. After getting approval for a direct equity investment, you can invest up to 10% of the paid-up capital of a company via a Demat account.

Mutual Fund

As a UK-based NRI, you do not have any restrictions on investing in mutual funds. Thus, it can become an effective asset to grow wealth as an NRI investor.

Derivatives

The UK-based NRIs can also trade in Futures and Options. However, you need a custodial participant (CP) code and a clearing member to invest in the F&O market.

Actual Trading Process for NRIs

As an NRI, you can invest or trade in securities in the Indian stock market as any Indian citizen. For example, to trade in stocks, you must select your preferred company stocks, choose the number of stocks you want and buy them at the market price or limit.

As an NRI, you need a trading account to buy or sell stocks and a Demat account to hold securities in electronic format.

However, depending on company stocks or securities, guidelines might differ for NRIs, and you might not be able to buy certain stocks. Therefore, it is wise to consult with your broker or DPs before investing.

A Few Key Aspects for NRIs Trading in the Indian Stock Market

Now that you have an idea of how can an NRI invest in the Indian stock market, there are additional aspects you need to know:

1. As an NRI, you can invest in securities like ETFs, equity shares, equity derivatives, mutual funds and bonds.
2. For short-term and long-term capital gains, you are liable to taxes, just like an India-based investor.
3. You must obtain the code for Custodial Participant (CP) to invest in futures and options.
4. You cannot participate in intraday, BTST, or STBT trading. Also, you cannot participate in short-selling.

Tax Implications on Capital Gains

An NRI is equally liable to taxes, just like an Indian investor in the stock market. Below is a breakdown of the tax implications:

Final Words

Being an NRI, you must know how can an NRI invest in the Indian stock market to diversify your portfolio. With a repatriable or non-repatriable Demat account, you can trade in securities, such as ETFs, mutual funds, and more, depending on the country you currently reside in. 

FAQs:

Can I use my resident Demat account to trade on the Indian market as an NRI?

No, you cannot use your resident Demat account to trade in India. With a repatriable or non-repatriable account, you can trade or invest in India.

How to trade in the Indian stock market from abroad?

To start your investments or trades in the Indian stock market, you need a PIS bank account with your Demat account.

Which Demat account is good for an NRI?

Before choosing a broker or DP for a Demat account, you must compare their services. With PL Capital Group – Prabhudas Lilladher, you can get an account and trade from the dedicated app.