For NRIs looking to invest ₹10 crore in India over a 5-7 year horizon, financial experts recommend a strategic allocation framework. According to Raghvendra Nath, MD of Ladder Up Wealth Management, the recommended allocation includes 60% in equities, 20% in alternatives, and 10% in fixed income, with the balance in real assets or other diversifiers. As reported by ETMarkets, this framework should be considered alongside existing India exposure, liquidity requirements, risk tolerance, and tax situation. The choice between concentrated vs diversified approaches depends on individual investment goals, risk appetite, time horizon, and ability to research investments. Nath specifically avoids gold and real estate for NRIs investing from thousands of kilometres away, citing that gold is an international commodity available in home countries and real estate management responsibilities are concerns for distant investors.
With the rupee hitting ₹96 per USD, currency depreciation is becoming an increasingly important factor for NRIs investing in India. According to Nath's analysis, the depreciation has happened over a very short period and fast, with whatever little gains investors had in equities over the last one to one and a half years being washed away by the depreciation. As reported by ETMarkets, many NRIs, especially in the Gulf, continue to see every dip as a chance to send more money home without considering what depreciation has already done to their existing holdings. However, Nath notes that the depreciation may have hurt a few people but also creates opportunities, as the rupee has reached levels that were completely unexpected. With an augmented level for forex reserves that RBI shall have and a general consensus globally on USD weakness, there is a very high probability that INR depreciation is going to be very nominal over the next few years. NRIs remain optimistic about India's long-term growth prospects but are placing greater emphasis on factors such as currency risk, diversification across asset classes, repatriation considerations, and post-tax returns.
The biggest hurdles for NRI investments remain not access to India, but navigating the complexity around account structure, KYC requirements, FEMA compliance, repatriation rules, and taxation across different investments. According to Nath's interaction with ETMarkets, the biggest hurdles are mostly related to regulation and paperwork, including that you cannot repatriate money easily from an NRO account and every time you repatriate money, even from your NRE account, there is a certain amount of paperwork involved. In equity markets, when NRIs invest in direct stocks, their investments are clubbed with FPI limits, making many stocks unavailable for investment by NRIs. Additionally, when an NRI invests in stocks through mutual funds, there is compulsory TDS, which is not the case for resident Indians. The investment journey can still feel fragmented despite increasing digitization, with key hurdles including documentation requirements such as KYC, FATCA/CRS declarations, PAN, overseas address verification and bank account mapping. Account structuring remains another area of confusion, particularly around choosing between NRE and NRO accounts and understanding implications for repatriation. The solution lies in approaching India allocation as a strategic long-term growth story rather than tactical timing, with the right concentration level matching conviction, risk capacity, investment horizon, and financial goals.
Tax treatment varies significantly by asset class, holding period, income nature, account structure, and NRI's country of tax residence. As reported by ETMarkets, there is no single NRI tax rate applicable across equities, mutual funds, bonds, and alternatives. In India, listed equity and equity-oriented mutual funds are generally taxed based on holding period, with short-term gains taxed at 20% and long-term gains taxed at 12.5%, with the specified annual exemption for long-term capital gains on certain financial assets. Debt mutual funds, bonds, fixed deposits and alternative investments are subject to separate tax regimes depending on the nature of the instrument and type of income. The important difference for NRIs is that TDS is often deducted at source, especially on redemptions or income distributions, and they may need to file an Indian tax return to claim a refund or apply treaty benefits where eligible. For direct equity investing, NRIs need to ensure the correct investment account structure, including Portfolio Investment Scheme (PIS) or non-PIS route as applicable. The choice between NRE and NRO accounts is crucial, with NRE being the completely freely repatriable account with no conditions attached, while NRO allows only partial repatriation up to USD one million a year. NRO accounts are rupee accounts into which all income generated from local Indian sources other than equities and mutual funds is credited, and money from property sales or rental income must first go into NRO before repatriation.
The biggest opportunity for NRIs lies in GIFT City, which offers a globally accessible, professionally managed India multi-asset portfolio with seamless onboarding, consolidated reporting, transparent taxation and simplified repatriation. According to Nath's insights, GIFT City offers the same benefits as other investment hubs—Singapore, Hong Kong, the Cayman Islands, the British Virgin Islands, DIFC, etc—making the vehicle extremely attractive for NRIs. A number of managers have set up investment vehicles in GIFT City for Indian investors, and all NRIs should look at these vehicles seriously as it makes the process of investing extremely easy. Ladder Up Asset Managers is also launching a Fund of Funds (FoF) through GIFT City, investing in mutual funds and therefore offering no withholding tax, making it a highly tax-efficient tool for NRIs. GIFT City has the potential to become a preferred investment gateway for NRIs, offering foreign currency based investments, simpler repatriation, and access to a wide range of India-focused and global investment products within a single international financial ecosystem. The real opportunity is not to add more products, but to remove friction from the investment journey, making India easier to access, manage and invest in.
Experts are witnessing increasing interest from NRIs in alternative investment products beyond traditional listed equities and mutual funds. According to Nath's observations, sophisticated NRIs, specifically those with a long-term positive outlook on the Indian economy, are looking at these alternative products for investment into India. These products can provide access to real assets without direct ownership requirements, though growth opportunities will come from portfolio diversification rather than any single product category becoming universal. As reported by ETMarkets, PMS and AIFs are gaining traction because they offer more differentiated strategies, including concentrated equity, long-short, private credit and thematic allocations. REITs and InvITs are relevant because they offer a listed, regulated route to income-generating real assets without the operational burden of owning property directly. Over the next few years, private credit, REITs/InvITs and professionally managed equity strategies could see meaningful growth in NRI portfolios, provided investors understand liquidity, risk, taxation and suitability. The core idea behind diversified investment portfolios is to balance portfolio risk by spreading investments across multiple securities, sectors, asset classes, geographies, or other sources of risk.
