How Can NRIs Invest in Mutual Funds in India?

The aura is hard to miss, and the growth is impossible not to take a look at. No, we aren’t talking about any celebrity but the humble mutual fund. The Indian mutual fund industry has clocked impressive growth over the years, with assets under management (AUM) growing from ₹12.02 trillion on February 28, 2015, to ₹64.53 trillion as of February 28, 2025 . If you are a non-resident India (NRI) looking to cash in on this growth, the good news is you can do so with ease. How? Let’s find out.

Can NRIs Invest in Mutual Funds?

As said, you can invest in mutual funds as an NRI. However, you need to meet certain conditions and follow the guidelines laid. Before pouring your money into Indian mutual funds, ensure to tick all these boxes:

• Check Your NRI Status

Ensure you qualify as an NRI as per the Foreign Exchange Management Act (FEMA). If you are an Indian citizen living abroad for 182 days or more , you qualify as an NRI.

• Set Up Your Bank Account

Indian asset management companies (AMCs) aren’t allowed to accept money in foreign currencies. Hence, you’ll either need a non-resident external (NRE) or non-resident ordinary (NRO) account. Your choice depends on your needs.

➔ You can opt for an NRE account if you want full repatriation of funds that allows you to send your overseas earnings to India. ➔ You can opt for an NRO account if you want to use your income earned in India to manage your expenses

• Complete Your KYC

Think of this as India’s way of making sure you are who you say you are. Once your residential status changes to NRI, you need a fresh KYC with the relevant documents, including passport, overseas address proof, a canceled cheque, etc.

NRI Investment in Mutual Funds: The Process

Now that you’ve checked all the boxes, let’s talk about how you can actually invest. There are two main ways:

• Online Investments

Most AMCs allow NRIs to invest through their websites. Just log in, complete the formalities, and start investing. If you love the DIY approach, this is for you.

• Through a Power of Attorney (PoA)

If you don’t want to deal with paperwork, you can appoint someone in India to handle investments for you. Just ensure they’re KYC-compliant too.

Mutual Funds for NRIs in India

As an NRI, you can invest in almost all types of mutual funds in India, including equity, debt, hybrid, etc. If you’ve an aggressive outlook, you can invest in equity funds. On the other hand, if you like to play it safe, you can opt for debt funds. Hybrid funds, on the other hand, give you the best of both equity and debt.

In Conclusion

Investing in a mutual fund for NRIs in India isn’t complicated. However, it does come with a few extra steps. The key is to get your documentation sorted, choose the right bank account, and pick a fund that aligns with your goals.