Can NRIs Invest in Mutual Funds in India? Yes, Here’s Exactly How

Introduction

The short answer is yes. NRIs (Non-Resident Indians) and OCIs (Overseas Citizens of India) can legally invest in SEBI-regulated mutual funds in India. There are no blanket restrictions — though the process, tax treatment, and available fund options vary depending on where you live.

This is one of the most frequently searched questions by Indians living abroad, and for good reason. India’s mutual fund industry manages over ₹65 lakh crore in assets. Historical equity returns have averaged 12–14% annually over the long term. And for NRIs who grew up understanding the Indian market, mutual funds offer a familiar and regulated way to stay invested in India’s growth.

This guide answers every variant of the question: what you can invest in, what you need, which accounts to use, how tax works, and where to start.

What Types of Mutual Funds Can NRIs Invest In?

NRIs can invest in nearly all categories of SEBI-regulated mutual funds in India:

• Equity funds — large-cap, mid-cap, small-cap, flexi-cap, sectoral/thematic, ELSS (tax-saving)

• Debt funds — liquid, ultra-short, corporate bond, gilt, dynamic bond

• Hybrid funds — balanced advantage, aggressive hybrid, conservative hybrid, multi-asset allocation

• Index funds — Nifty 50, Sensex, Nifty Next 50, sectoral indices

• Fund of Funds (FoFs) — including international FoFs, though some may have restrictions

There are over 40 Asset Management Companies (AMCs) in India offering thousands of fund schemes. The breadth of choice is one of the advantages of investing directly in Indian mutual funds versus buying a single India ETF on an overseas exchange.

Who Is Eligible?

You can invest if you fall into any of these categories:

• NRI (Non-Resident Indian) — an Indian citizen who has resided outside India for more than 182 days in a financial year

• OCI (Overseas Citizen of India) — foreign nationals of Indian origin who hold an OCI card

• PIO (Person of Indian Origin) — merged with OCI category since 2015, treated equivalently for investment purposes

One important exception: NRIs based in the United States and Canada face additional restrictions. Due to FATCA (Foreign Account Tax Compliance Act) and related compliance requirements, some Indian AMCs do not accept investments from US or Canadian NRIs. This restriction does not apply to NRIs in Australia, New Zealand, the UK, UAE, Singapore, or most other countries.

Worth noting: Platforms like Indus go a step further. Indus is not limited to NRIs — it’s open to any New Zealand or Australian resident who wants to invest in Indian equity mutual funds. Whether you’re an Indian citizen on a work visa, an OCI cardholder, a permanent resident, or a naturalised citizen with no Indian heritage at all, you can use Indus. All you need is a local driver’s licence.

What Do You Need to Get Started?

Four things:

1. Indian PAN card. A Permanent Account Number is mandatory for all mutual fund investments in India. If you don’t have one, you can apply online through NSDL or UTIITSL. Some platforms, including Indus, can assist with the application process.

2. KYC compliance. Know Your Customer verification is required before you can invest. This involves identity verification (passport, PAN), address proof (overseas and Indian, if applicable), and in-person verification (IPV) which can now be done digitally via video KYC on most platforms.

3. NRE or NRO bank account. Mutual fund investments must be routed through an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank account in India. NRE is preferred for fresh investments from abroad because it’s fully repatriable.

4. An investment platform or AMC account. You can invest directly through AMC websites, through registrars like CAMS/KFintech, or through NRI-focused platforms like Indus that consolidate multiple AMCs and handle the compliance layer for you.

How NRIs Actually Invest: The Process

The traditional process involved visiting an Indian bank branch, submitting physical forms, getting wet-ink signatures attested, and waiting weeks for KYC verification. In 2026, digital platforms have compressed this to minutes.

On a platform like Indus, the process is dramatically simpler than the traditional route. All you need is a local driver’s licence (NZ or AU) to get started — no Indian bank branch visit, no physical paperwork. Indus handles PAN verification, KYC, and regulatory compliance digitally. Total time: about three minutes. For New Zealand residents, Indus also automates DTAA compliance, so TDS is claimed back automatically and you pay 0% Indian tax on your returns.

Indus is registered with the FMA in New Zealand and authorised under an AFSL licence holder in Australia.

You have two investment modes:

• Lump sum — a one-time investment of a fixed amount

• SIP (Systematic Investment Plan) — a fixed amount invested automatically every month. SIP is particularly popular among NRIs because it removes the need to manually transfer and invest each month, and it averages out your entry price over time.

Tax on Mutual Fund Returns for NRIs

This is where it gets country-specific. India deducts TDS (Tax Deducted at Source) on mutual fund capital gains for NRIs. The rate depends on the fund type and holding period. But the critical variable is whether your country has a DTAA (Double Tax Avoidance Agreement) with India that reduces or eliminates TDS.

For NRIs in New Zealand

The India-NZ DTAA reduces TDS on mutual fund capital gains to zero percent. You receive your full returns with no Indian tax deduction. This makes NZ one of the most tax-efficient countries in the world for NRI mutual fund investing. Indus applies the DTAA automatically for NZ investors.

For NRIs in Australia

Australia does not have a DTAA with India that eliminates TDS on mutual fund gains. TDS is deducted at standard NRI rates (12.5% LTCG on equity, up to 30% on debt). However, Australian investors may be able to claim a foreign income tax offset on their Australian tax return for the TDS paid in India. Indus provides a detailed tax statement for this purpose.

For NRIs in Other Countries

Standard TDS rates apply. The availability and rate of DTAA benefits vary by country. UK, UAE, and Singapore NRIs each have different treaty provisions. If you’re outside NZ or Australia, check the specific DTAA between India and your country of residence.

Can NRIs Invest Through SIP?

Yes. SIP is available to NRIs in exactly the same way as it is for resident Indians. You choose a fund, set a monthly amount, and the investment happens automatically on a fixed date each month.

For NRIs, SIP has an additional benefit: currency cost averaging. Since you’re converting foreign currency (AUD, NZD, GBP, USD) to INR each month, SIP automatically averages your exchange rate over time. When the rupee is weak, your foreign currency buys more units. When it’s strong, you buy fewer. Over years, this smooths out currency risk significantly.

What Else Can NRIs Invest In (Beyond Mutual Funds)?

For completeness, NRIs can also invest in:

• Indian stocks — through the Portfolio Investment Scheme (PIS) with RBI approval. Requires a designated demat account and PIS-linked trading account. More complex than mutual funds.

• Fixed deposits (NRE/NRO FDs) — through Indian banks. Interest rates are generally lower than equity mutual fund returns over the long term, but offer capital protection.

• Real estate — NRIs can buy residential and commercial property in India (not agricultural land). Involves higher capital, legal complexity, and illiquidity.

• Government bonds and NPS — NRIs can invest in government securities and the National Pension System, though NPS has restrictions for OCI holders.

Mutual funds remain the most accessible, diversified, and liquid option for most NRIs. They don’t require a demat account (for most fund types), offer professional management, and can be started with as little as ₹500 per month.

Get Started in 3 Minutes

Indus makes investing in Indian equity mutual funds simple for anyone living in New Zealand or Australia. You don’t need to be an NRI — any NZ or AU resident can use the platform. The traditional process of opening NRE accounts, chasing KYC paperwork, and navigating Indian banking systems has been replaced by a 3-minute digital onboarding. All you need is a local driver’s licence. Indus is registered with the FMA in New Zealand and authorised under an AFSL licence holder in Australia. For NZ investors, DTAA compliance is automated — you pay 0% Indian tax on your returns.