India is one of the fastest-growing economies, with a GDP growth rate of approximately 7% per year over the last decade. Emerging sectors like e-commerce, fintech, healthcare, and renewable energy have accelerated the growth of the Indian economy. India’s economic growth has translated into the growth of the Indian stock market in recent years.
The nifty 50 has yielded 70% returns in the last five years, and some stocks have grown exponentially.
Impressive returns over the years have prompted NRIs to consider India an attractive destination to trade and invest funds. Tech brokerages, liberalized policies, portfolio diversification, and growing interest in the Indian stock markets led to the sudden influx of capital from the global Indian community.
To make NRI participation feasible, accessible, and cost-effective in the Indian stock market, FYERS launched an online portal for NRI trading and investing with minimal documentation in 2022.
The response was great!
To better serve a large diaspora of people of Indian origin residing outside India, FYERS has recently reduced brokerage charges to ₹50 per traded order from ₹100 for all NRI trading and demat accounts.
The move underscores our commitment to offering exceptional service to clients while ensuring we remain competitive in the broking industry.
Now let’s dive deeper into the different types of NRI demat accounts, charges applicable, benefits of investing through FYERS, and more.
NRI demat accounts are of two types:
Non-Resident External (NRE)
The objective of the NRE demat account is to allow NRIs to buy/sell securities on a repatriable basis. With this account, NRI can invest the income earned abroad in the Indian capital markets. This account can easily convert any foreign currency deposited to Indian currency.
However, it is worth noting that with an NRE Demat account, you can solely invest in the Indian stock market via the Portfolio Investment NRI Scheme route. Both the principal and interest amount is repatriable.
*Repatriation - In the Indian context, it typically refers to the transfer of funds from a foreign country to India or vice-versa.
Non-Resident Ordinary (NRO)
NRO demat account is used for trading shares, futures, and options, with the option of repatriation. Opening a demat account under NRO exempts an NRI from the Portfolio Investment Scheme route. The principal and interest earned are repatriable only to the extent of $1 million in a financial year.
Refer to this article to learn the process of opening the NRI Demat account.
The account opening and annual maintenance are free of cost for all types of NRI demat accounts. The brokerage charge for equity delivery is 0.5% or ₹50 (whichever is lower). To know more, click here.
Note: The brokerage charges are reduced to ₹50 per traded order.
Like resident investors, tax on capital gains also applies to NRIs. Understand the applicability of tax rates, TDS deduction, and other rules and regulations.
An NRE account is domestic for keeping foreign income in an Indian denomination. As this account is responsible for storing the income earned from foreign nations, any income from savings, fixed deposits, or capital gains is tax-exempt.
Alternatively, any income earned in an NRO account is taxable like the residents of India. Also, the gains are subject to tax deduction at source (TDS) at 30% without any deduction.
NRIs are also subject to taxes on the income earned by investing in listed equity shares or equity-oriented mutual funds. The taxability is similar in the case of residents and non-residents.
Investments held for less than 12 months will result in short-term capital gains taxable at 15%.
In contrast, investments held for more than 12 months will result in long-term capital gains taxable at 10% (exceeding ₹1,00,000).
Above all, if there is any double taxation avoidance agreement (DTAA) between India and the foreign country, then any income taxable in the NRIs country of residence will not be liable to be taxed in India.
FYERS is a one-stop destination empowering NRIs to trade and invest in the Indian financial markets. Here are some key reasons why FYERS is an excellent platform for NRI investment:
The company offers a user-friendly and easy-to-navigate platform, making it feasible for NRIs unfamiliar with the Indian stock market. The platform provides access to advanced charting and analysis tools to help NRIs make informed investment decisions.
Low Brokerage Charges
It has recently reduced the brokerage charges to ₹50 per traded order for all NRI trading and demat accounts. The brokerage charge is one of the lowest in India, making NRI investment cost-effective and efficient.
It has implemented a simplified and quick account opening process for NRIs with minimal documentation. Click here to open NRI demat account immediately.
FYERS is a registered and regulated discount broker, ensuring compliance with all regulatory requirements. The company provides a safe, secure platform to trade and invest in Indian stock markets.
Dedicated support team
The company has a responsive, efficient, and dedicated support team to answer queries and resolve issues related to trading at the earliest. They are known to be prompt in their responses and provide effective solutions to the complaints raised by clients.
As the Indian economy is on a trajectory of growth and development, it is an excellent opportunity for NRIs to invest and trade in Indian stock markets. Global Indian diaspora spread across the Middle East, the US, UK can now easily step into the world of Indian equities and grab the benefit of diversification.
Launching NRI trading and investing through the FYERS platform benefits the NRI community and can strengthen India’s stock markets. To initiate the account opening process, click here.
Trade Smart, Invest Smart with FYERS at the lowest brokerage!
NRIs can buy/sell securities under the portfolio investment scheme (PIS) on a repatriation or non-repatriation basis.
NRIs can trade/invest in securities through a Non-Resident External (NRE) or Non-Resident Ordinary account.
NRIs can trade in Futures and Options from the funds held in the NRO account on a non-repatriation basis.