FREE Account Opening + Zero AMC Fees* + MutualFund SIP1

NRI Trading in India

Rated 4.5/5 by InvestorGain Team

  1. The Pioneer Discount Broker
  2. Get 100% Free Delivery Trading
  3. Free Direct Mutual Funds & SIP
NRI Trading in India - Eligibility, Process, Rules, Restrictions

In recent years, NRI trading has gained popularity as more and more NRIs invest in the Indian market. If you are an NRI looking to trade or invest in Indian stock , then you have come to the right place. This article serves as an important guide to understand everything about NRI trading in India such as who is an NRI, types of NRI trading accounts, NRO vs NRE account, NRI trading rules and regulations, trading restrictions for NRIs when investing in India, and much more!

Before we proceed, let’s first understand whether you qualify as an NRI or not.

Non-Resident Indian (NRI)

As per the Income Tax and Foreign Exchange Management Act (FEMA) guidelines, an Indian citizen who resides overseas or abroad for at least 183 days or more in a financial year, is known as a non-resident Indian or NRI.

NRI can stay abroad for any reason be it business, education, employment, or other.

Can NRI invest in India?

As an NRI, you may be asking yourself whether you are allowed to invest in companies listed on the BSE and NSE or not. The answer is clearly “yes."

As per SEBI regulations, NRIs are allowed to invest in equities, mutual funds, government securities, treasury bills and IPOs and also trade in equity futures and options.

But again, the question arises: why should NRIs invest in India?

Over the past few decades, India has emerged as one of the fastest-growing economies in the world with an average annual GDP of 6.5-7%.

Therefore, investing in India is proving to be a rewarding opportunity for NRIs. They help NRIs not only to diversify their investments geographically but also to diversify their portfolio across various instruments such as equities, bonds, stocks and even across various sectors and industries.

Types of NRI Trading Accounts

To trade or invest in Indian stock exchanges, NRIs have to open NRI trading and demat accounts in India. It can be opened with any discount broker or full-service broker who offers NRI trading services.

Let's discuss different types of accounts required for NRI trading;

1. NRE or NRO bank account: NRIs tempted to explore investment opportunities in India must first open an NRI bank account. As an NRI, you can open either a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) bank account.

  • NRE Bank Account: NRIs who are earning money in foreign currency but want to remit it in the Indian currency Rupee should open an NRE account in India. NRI can use the funds from NRE account to invest it in the Indian companies. All deposits or fund balances from the NRE account can be repatriated or transferred to abroad.
  • NRO Bank Account: If an NRI want to manage the income earned in India can open an NRO savings bank account. NRIs are Indian citizens thus, any income received in the form of rent, pension, business income, dividend, etc. in Indian currency should be deposited to an NRO account. Unlike NRE, NRO account balance and interest is not fully repatriable, an NRI can repatriate maximum of USD 1 million in a financial year.

Know more on NRE Vs NRO Account

Once you open an NRI bank account, you can choose to invest in India through PIS (Portfolio Investment Scheme) or through PIS. PIS is an RBI scheme that allows NRIs to invest in listed Indian companies on the BSE and NSE. RBI has authorized certain banks to provide the PIS letter to NRIs. All transactions processed through the NRI PIS account will be reported to the RBI.

NRIs are even allowed to invest in India using non-PIS NRO trading account thus PIS is not mandatory and NRIs can even trade without PMS.

2. NRI Trading Account: Trading account acts same for residents and non-residents as it is used to place and execute buy and sell orders. With an NRI trading account, they can buy and sell stocks listed on BSE and NSE, F&O contracts, or invest in mutual funds.

As an NRI, you can link either an NRE or NRO bank account to your trading account to invest on a repatriation or non-repatriation basis.

3. NRI Demat Account: The demat account is opened by NRI to receive delivery of shares and securities in dematerialized form. In this way, all equity and mutual fund investments held by NRI will be safely kept in the NRI Demat Account.

NRI 2-in-1 Vs NRI 3-in-1 Account

Oopening an NRI trading account is the first requirement to invest in Indian market.

NRI 2-in-1 account: An NRI 2-in-1 account combines NRI trading and NRI Demat account. Top discount brokers in India who are not part of any banking house like Zerodha, Angel One, Fyers, Prostocks, etc. avail NRIs to open a 2-in-1 account.

Although these banks partner with RBI-authorized banks to help NRIs to get PIS permission letter.

NRI 3-in-1 account: It is an integrated platform that combines 3 different accounts; NRI Trading Account, NRI Demat Account, and NRE/NRO Bank Account. The most important benefit of having a 3-in-1 NRI account is it allows seamless fund transfer between NRI trading and bank account.

Full-service brokers like ICICI Direct and HDFC Securities provide 3-in-1 account opening facility to NRIs.

Best Brokers for NRI Trading

There are many discount and full-service stock brokers offering NRI trading services, but among all it is difficult to find the best NRI trading broker.

NRI discount brokers like Zerodha, Prostocks, Fyers, etc. offer 2-in-1 account and fees flat brokerage fees from NRI clients. Full-service brokers, on the other hand, allow NRIs to open an integrated NRI 3-in-1 account and also offer value-added services such as PMS, research, and advisory services, but charge a fixed percentage of the trade value as brokerage fee.

Want to know the best NRI trading accounts in India? Here is a list of the best brokers for NRI account openings. These brokers are recommended because of the cheapest NRI brokerage fees, zero NRI demat AMC account, diverse investment offerings (stocks, F&O, mutual funds, etc.), and dedicated NRI customer service.

NRI Trading and Investment Products

  • Equity: Invest in companies (delivery trading) listed on NSE and BSE
  • Equity F&O: NRIs can trade in the equity derivatives segment using the NRO account only.
  • Mutual Funds: NRI can purchase and redeem units of domestic mutual funds.
  • Initial Public Offering: NRI can participate in the primary market too by applying for IPOs.
  • Government securities
  • Treasury bills (T-bills)
  • Listed non-convertible preference shares and debentures
  • National Pension Scheme (NPS)

NRI Trading Process Explained

The NRI trading process is somewhat similar to the trading and investing done by an India-based investor. Learn how NRI trading works in India in simple steps;

1. Open NRI Trading Account

To get started with NRI trading, the first step is to open an NRI trading and demat account with a stock broker in India. NRIs can link either an NRE or an NRO account to their trading account to transfer and withdraw funds. They can also choose to invest through PIS or not through PIS by mapping an NRO bank account.

2. Transfer Funds

Once you have opened a PIS account, you will need to transfer funds from your NRE or NRO bank account to the PIS account. Your bank will notify your broker of the PIS account balance, which will then be updated as a trading limit or margin in your NRI trading account.

However, if you do not have PIS NRO account, you can deposit the money directly to your trading account through a payment gateway, IMPS, NEFT or RTGS.

3. Place buy or sell order

Place buy or sell orders by logging into your NRI trading account on the mobile app or desktop or web platform. If your NRI account has sufficient funds, your order will be executed.

In case of PIS account, a contract note will be sent by the broker to the respective bank to transfer the funds. When an NRI sells shares from his demat account, his bank account (NRE or NRO) is credited with the net balance after deducting TDS. Settlement of shares will be done within T+1 days.

NRI Trading Rules and Regulations

  • Although NRIs are allowed to invest in Indian equities, their investment is subject to a maximum cap. As per SEBI rules, an NRI can invest a maximum 5% of company’s paid-up capital on a repatriation (NRE) or non-repatriation (NRO) basis.
  • NRI can trade in F&O using NRO account only, and a custodial participant (CP) code is also required.
  • Investments in India by NRIs are subject to TDS.
  • NRIs cannot have more than 10% investment in shares of an Indian company. This means, the maximum NRI investment in Indian equities is restricted to 10% of company’s total paid-up capital.
  • NRIs are not allowed to invest in certain sectors like gambling, lottery business, real-estate business, chit fund business, manufacturing of tobacco, cigarettes, and other tobacco products.

NRI Trading Restrictions

NRIs have certain trading restrictions, here is a list;

  • Buy today, sell tomorrow or short selling is not allowed for NRIs.
  • NRI cannot do intraday (MIS) trading.
  • NRIs cannot trade in commodity derivatives.
  • NRIs cannot participate in currency derivative trading.
  • NRI can sell shares only after receiving its delivery into their Demat account.
  • NRI can have only one PIS account.
  • NRIs are barred from trading in banned stocks.
  • NRI trading in stocks under caution list requires RBI approval.

Zerodha Trade@20

Want to start your investment journey, join India’s Pioneer Discount Broker – ZERODHA – Free Delivery Trade, Maximum Rs 20 for F&O and Intraday, Free Direct Mutual Fund investment.Open Zerodha Account

Last updated on 2nd Oct 2023


The NRE Bank Account is Non Resident External Account. Since it is an external account, any money lying in NRE account can remitted outside the country which means the money is repatriable. The money can transfer from NRE to NRO Account. It can be a saving or current account. With this account, NRI has to go through the PIS route to trade in Indian Stock Market.


The NRO Bank Account is Non Resident ordinary Account. With the NRO Account you have restricted repatriation of 1 million USD per annum. The money cannot be transferred from the NRO Account to NRE Account. An NRI with NRO saving account is no longer required to open PIS Bank Account for investment in Indian stock market.


Similarities and Differences between NRE and NRO Account

NRE Saving Account NRO Saving Account
Account Type NRE account can be a Saving Account or Current Account NRO Account can be a Saving or Current Account
Average Monthly Balance in Account Rs 10,000 Rs 10,000
Repatriation Principal and Interest earn is fully repatriable Restricted or partially repatriable (upto $ 1 million in a financial year)
Taxation NRE Account is tax free Interest earn and credit balance has tax liability
Earnings in India Any type of earning in India cannot be deposited in NRE Account Earnings in India can be deposited in NRO Account
Joint Account NRE Account can only be jointly open with NRE only Can be open jointly with NRI or close relative in India


  • Open a NRE or NRO Account with designated Bank in India.
  • Take PIS (Portfolio Investment Scheme) approval letter from RBI (only for NRE Account).
  • Open Trading and Demat account with registered Broker.
  • If you like to open NRI Trading Account, Please leave your information here and we will help you to open account ASAP.


  • Intraday trade is not allowed to NRIs.
  • All contract notes of buy and sell transaction have to be reported to the PIS banker by your Broker.
  • Every sell transaction will be credited to the client's bank account net of Tax. Hence, for every sell transaction capital gains will be calculated by the CA.
  • Long term capital gain tax and short term capital gain tax to be taken care by the investor.


Portfolio Investment Scheme PIS is the scheme of RBI through which an NRIs and PIOs can buy and sell shares and convertible debentures of Indian companies on a recognized stock exchange in India by routing all their transactions through a designated bank branch on repatriation benefit basis.

There are few branches of some Banks that are designated by RBI that an NRI can have accounts with to invest in Indian Share Market.


Non Resident Portfolio Investment Scheme Account is called NRI PIS Bank Account. Any NRI or PIO holder wish to invest in Indian Share Market via NRE account must have a PIS Account with one designated Bank in India. Now with the new RBI circular, you only need PIS letter if you want to map NRE account with trading account. However, for NRO account you are not required to get PIS letter and you can map your NRO Account to Trading account with any Broker.


NRI-NRE Account holder can trade in Equity Delivery and Equity F&O Delivery.

An Intraday Trading is not allowed fro NRIs.

Stock holding of an NRI can't exceed 10% in any Indian listed company subject to overall limit for listed equity shares of each company on repatriation benefit basis. Here is the list and limit on stock holding by NRI.


  • Equity Segment: Delivery based trade only
  • Equity Derivative Segment : Futures and Options trade for carry forward.
  • Currency Derivative Segment : Currency Futures trade for carry forward.
  • Note: Intraday Trading is not allowed to NRO Account.
  • NRI investment in equity shares of listed company without repatriation benefit is treated at par with resident Indian and there is no upper limit. Please refer the recent amendment in FEMA on RBI website at following link1 and link2


If you intent to trade in Equity Derivatives Segment, you have to come through the custodial route. You will need to open NRO Custody Account. Brokers like Zerodha and ProStocks offer NRO Custody account from ISSL, which is IL&FS Group Company. Your settlement obligation for trades in Equity Derivatives Segment will be done by ISSL from your custody account. ISSL charges custody account management charges and you need to do KYC with ISSL also. Your Broker will assist you in opening your custody account with ISSL. ISSL will permit custody account with assets not less than USD 5000.


  • Contact a Clearing Member (CM) like IL&FS and submit the application for custodial participant (CP) code.
  • The Clearing Member request the National Securities Clearing Corporation Ltd. (NSCCL) to allot a CP code in respect of client for which the member would be carrying out clearing and settlement.
  • Clearing Member share the custodial participant (CP) code with you.
  • Open the NRI trading account with your choice of broker and provide them the CP code.
  • The broker will use the CP code for all your trade settlements.


To open a Custody Account you need to complete certain documents:

  • A Custody Account Opening Form including net-worth certificate, application for applying CP code etc.
  • A Custody Agreement.
  • A Power of Attorney granted in favor of ISSL.
  • All other standard documents related to Proof of Address, Identity etc.
  • If the documents are executed outside India then the consularisation / notorisation is required on all the documents.


You can request your Bank to close your PIS Account and move to non-PIS way. In such case you need to contact your bank and send broker a revocation letter and closure of PIS acknowledgement copy.


The NRO Trading Account is subject to applicable withholding tax. This withholding tax is known as Tax Deducted at Source. Your broker need to deduct withholding tax and deposit to Tax Department, for that brokers need to take external service of Chartered Accountant.


Banks have authority to redesignate such accounts as resident accounts on return of the account holder to India. When you convert your account in resident account, you will get interest till last date.


As per the latest RBI circular, if you have a NRO (non-repatriable) bank account, you can map that to the trading account and it will be like a normal resident account.


Your Broker will calculate the tax with the help of a CA and deduction will be done by the Bank where you are holding the NRI Account.


Axis Bank, HDFC Bank, Yes bank, SBI Bank, ICICI Bank, Indusind Bank, Kotak Bank.


Unlike resident accounts, there is a huge manual process supporting NRI clients. There is incremental efforts involved in all NRI trades including updating balances, reporting contract notes, reconciling receipt/transfer of funds etc and hence the higher charge.


User Reviews

7. Vijay J Jan 05 2020 05:36:06 AM Reply
Hi, I''m an NRI living in USA. Recently, I heard I can invest in Indian equity through Non-PIS route. I have a NRO savings account with Yes bank. Which brokers/banks support equity investment for NRIs through non-PIS route? Please suggest. And also, please advise the steps
6. Premkumar Mar 25 2019 10:12:05 AM Reply

I am an NRI living in the USA. I like to open a demat account to trade in stocks, FDs and MFs in Indian markets.
I have NRE and NRO accounts with ICICI and HDFC. Can you help me on this?
6.1. Kunal Mar 27 2019 11:46:10 AM
Yes, for NRO account with HDFC and ICICI, its very easy to open trading and demat account. Please follow the above steps and complete the process.
5. Shoyeb Mar 25 2019 10:14:07 AM Reply
Dear Sir,
I want to open an NRI trading account for trading in equity. What is the process for the same?

5.1. Sachin D Mar 27 2019 11:44:27 AM
Opening NRI or NRO trading account is bit complex process. This process is not online so you need to do all paperwork offline and submit the document to the broker. Please read complete article which clearly informs the steps you need to follow.
4. S. Venkat Mar 27 2019 09:51:58 AM Reply
Looking to open demat and stock trading account, jointly with my wife. We are both Singapore citizens with OCI, PAN cards and a joint NRE account with HDFC.

Please help advise process to get enrolled with your Upstox. Please also advise if brokerage charges and AMC for trading and demat accounts are same as for a local Indian.
4.1. Vijay Jain Mar 27 2019 11:38:41 AM
Hello Sir,
Upstox has stopped opening new NRI account for now, they are still serving existing NRI customers. Other options for you are Zerodha, Prostocks, TradePlus.
3. Bipin shah Dec 13 2018 05:57:17 AM Reply
I am born and educated in India but have been out of country since 1961. I am holding Canadian passport and recently obtained PAN CARD with Canadian address.
I have 10000 shares in a company trading on BSE. Shares were purchased from the promoter. I wish to sell shares. To do so, I have to demate shares as mandated by Indian govt. I seek you advice in selection of a bank who can handle all the process up to and including transfer of fund. Any other information, advice relevant to my case will most certainly will be appreciated.
Thank you for help.
3.1. Ankush Singh Dec 20 2018 11:52:04 AM

This can’t be done before opening your NRE Bank account, as you want to move fund back to Canada. So in your case –

Step1: To open an NRE bank account with any of the Indian banks in Canada.

Step2:  Open and NRE Trading and Demat account. You can follow a list of documents and forms on our NRI Articles.

Step3: Submit dematerialization request for your physical shares.

Step4: Once you have Shares in your demat account, you can exit and get your money in NRE bank account.

Step5: You need to take care of taxation in India and Canada for such income.

2. Ashok Jun 21 2017 06:39:56 PM Reply
Dear Sir,

I am an Non Residence Indian and I am using NRO SB account for share investment ( Equity Delivery basis) but DP and trading account is not NRI Category and I have given normal Residence PAN CARD only.

But I just came to know that For NRI Separate Pan Card to be applied.

Kindly advice me.


2.1. CA Sachin jain Dec 20 2018 11:51:46 AM
As you have NRO SB account, please contact your broker to move your resident trading account to NRI trading account. You just need to submit the required documentation to move your account.
There is no requirement for new PAN card - which you have mentioned as NRI PAN Card, You bank account status and Trading Account status must have to be NRI (NRE or NRO account).