Overview

India's economy is growing rapidly, with its GDP expected to reach $6 trillion by the end of the decade. For NRIs, Indian stocks are an attractive investment option, with opportunities emerging across sectors like tech startups, renewable energy, fintech, electric vehicles, and healthcare.

Moreover, modern investment platforms have simplified the process, making participation easier for NRIs. They offer user-friendly interfaces, easy account setup, and seamless transactions, with step-by-step guidance and various investment options, allowing NRIs to manage their investments efficiently from anywhere.

Requirements to Start Stock Trading in India

Types of Accounts Needed

To begin trading in Indian stocks, NRIs need three essential account types:

1. NRE & NRO Bank Accounts: These accounts serve different purposes:

• NRE (Non-Resident External) accounts hold foreign income converted into Indian rupees, and the funds in these accounts are fully repatriable, meaning they can be transferred back to the NRIs' home country. 

• NRO (Non-Resident Ordinary) accounts, on the other hand, hold income earned in India, like rent or dividends. Repatriation of funds is limited to USD 1 million per year after paying taxes and obtaining tax clearance, and transfers can only be made to the NRI's country of residence.

2. Demat Account: This digital account stores your securities (stocks, bonds, etc.) electronically, eliminating the need for physical certificates. It acts as a digital locker for your investments.

3. Trading Account: This account is linked to your Demat account and allows you to buy and sell securities on stock exchanges. It serves as the gateway for executing market transactions. Without it, you cannot hold or trade stocks, bonds, or other securities electronically, limiting your ability to participate in the market.

Documents Required

To open these accounts, NRIs typically need to provide:

Mandatory Documents:

• Passport and OCI card (if applicable)

• PAN card (mandatory for financial transactions)

• Proof of overseas address (e.g., utility bills, bank statements)

• Visa/Work Permit (for NRI status verification)

• Photographs (passport-sized)

• Bank account details (NRE/NRO bank statements)

• FATCA declaration (for tax compliance)

Optional Documents (depending on the Depository Participant and your circumstances):

• Proof of Indian address (if available)

• PIS letter (for trading using NRE account) )

Account Opening Process

The process of opening accounts has become simpler with digital platforms:

1. Select a platform like Rupeeflo that specialises in NRI services. Rupeeflo offers tailored solutions to help NRIs invest in Indian markets, manage portfolios, and helps you be compliant with regulatory requirements.

Rupeeflo partners with leading banks and financial institutions and opens Non-Resident bank account, demat account and trading account with them.

2. Complete the online KYC (Know Your Customer) verification which involves submitting your identity and address proof

3. Submit required documents digitally

4. Sign agreements electronically

5. Fund your account to begin trading

Some NRIs also consider opening accounts through GIFT (Gujarat International Finance Tec-City) City, which offers tax advantages similar to offshore financial centres while maintaining regulatory oversight by Indian authorities.

Best Platforms for NRIs to Trade in India

For NRIs looking to invest or trade in Indian markets, Rupeeflo is a platform built specifically for them. It connects with major Indian banks and brokers to make the entire setup quick, easy, and digital.

Through Rupeeflo, NRIs can open NRE or NRO bank accounts with leading banks, along with Demat and trading accounts with top brokers. The entire process is online and designed to remove delays or paperwork.

Users who already have bank or trading accounts can connect them to the platform and begin trading in a few simple steps.

Rupeeflo also handles complex steps like KYC, FATCA compliance, and repatriation rules so users avoid the usual compliance barriers.

The platform brings everything into one place. It allows NRIs to manage accounts, transfer funds, and track investments easily. Every feature is designed to meet NRI's needs.

Platforms like Zerodha, ICICI Direct, and Kotak Securities provide access to Indian markets. Rupeeflo goes further by combining banking, trading, and compliance into one platform made for NRIs from the start.

Benefits of Investing in the Indian Stock Market for NRIs

 1. Diversify Your Investments  

Investing in Indian stocks helps NRIs spread risk across different markets and currencies. For example, if the economy in your country of residence slows down due to inflation, recession or political instability, your portfolio can still gain from India’s growth.  

 2. Benefit from India’s Growth  

India is one of the world's fastest-growing economies, with GDP rising by 6.2% in the December quarter of 2024 - 25, driven by strong consumer demand and public investment. By investing in Indian stocks, NRIs can tap into sectors like technology, healthcare and infrastructure that are expanding rapidly, gaining long-term growth opportunities.

 3. Earn Returns in Indian Rupees (INR)  

Your investments grow in INR, which can be useful if you plan to spend money in India later. Dividends and capital gains can also be reinvested or used for future expenses in India.  

 4. Easy Repatriation of Funds  

If you invest through an NRE (Non-Resident External) account, you can transfer your profits abroad. Converting INR back to foreign currency and sending it overseas is simple and doesn’t require extra approvals.

Taxation on Stock Market Investments

Capital Gains Tax

When NRIs sell stocks in India, they face two types of capital gains tax:

• Short-Term Capital Gains (STCG): If NRIs sell shares held for less than 12 months, the gains are taxed at 20%

• Long-Term Capital Gains (LTCG): For shares held over 12 months, gains exceeding ₹1 lakh are taxed at 12.5%. The first ₹1 lakh of long-term gains each year remains tax-free. 

Taxation on Dividend Income

When Indian companies pay dividends to NRI shareholders:

• Dividends are taxed according to the income tax slab rates applicable to NRIs

• Tax Deducted at Source (TDS) is applied at 20% (plus applicable surcharge and cess)

• If your country has a DTAA with India, you may be eligible for a reduced tax rate on dividends and can claim credit for taxes paid in India. For example, if you're a UK resident and receive dividends from an Indian company, the DTAA between India and the UK may allow you to pay tax on those dividends at a reduced rate of 15% instead of 20%. You can also claim the tax paid in India as a credit against your UK tax liability, ensuring you're not taxed twice on the same dividend income.

Repatriation Rules

The rules for transferring your investment proceeds overseas depend on which account you used:

• NRE Account Investments: Funds invested through an NRE account, including all profits and dividends, can be freely repatriated (sent back overseas) without any limits.

• NRO Account Investments: There are some restrictions on repatriating funds from NRO accounts. NRIs can repatriate up to $1 million per financial year from their NRO account, subject to tax clearance and documentation requirements.

Top Stocks with High-Return Performance (Last 5 Years)

1. Waaree Renewable Technologies Ltd 

Waaree makes solar panels and provides complete solar energy solutions. The company has grown fast as India shifts towards clean energy by helping homes and businesses switch to solar power. Over the past five years, Waaree Renewable Technologies has demonstrated significant growth, with revenue increasing by 54.9% CAGR (Compound Annual Growth Rate) and net profit growing by 231.21%.

2. Diamond Power Infrastructure Ltd

Diamond Power builds equipment for electricity transmission and distribution. With India upgrading its power networks and expanding electricity access, the company plays a key role in keeping the lights on across the country. In the last 5 years, Diamond Power Infrastructure Ltd (DIACABS) has experienced a 15.59% profit growth.

3. Larsen & Toubro Infotech Ltd. (LTI)  

LTI is an IT company that helps businesses go digital.   From banking to retail, it provides tech solutions that improve efficiency and growth, making it a trusted partner for global companies.  L&T Infotech (LTI) has achieved a strong profit growth of 24.8% CAGR over the past 5 years.

4. Max Healthcare Institute Ltd

Max Healthcare runs a chain of hospitals offering quality medical care. As India’s healthcare needs grow, the company has expanded its services, thriving from rising demand for better hospitals and treatments. Over the last 5 years, Max Healthcare Institute Ltd. has shown strong profit growth, with a Compound Annual Growth Rate (CAGR) of around 780%.  

5. Varun Beverages Ltd

Varun Beverages bottles and sells PepsiCo products like sodas and juices. It has shown strong profit growth with a CAGR of 39.8% and a median sales growth of 19.2% across 5 years and 10 years, respectively.With strong distribution and growing beverage demand, the company has become a major player in India’s drink market.  

These companies show how investing in growing sectors can lead to big returns. While they have done well in the past, investors should always research carefully before making decisions.

Conclusion 

Indian equities offer NRIs a way to participate in the country's economic growth while diversifying their portfolios. The market's performance across technology and renewable energy sectors presents interesting opportunities for long-term investors. For those looking to invest from abroad, platforms like Rupeeflo have made the process more accessible by simplifying documentation and compliance requirements. This combination of market potential and easier access makes Indian stocks worth considering as part of a balanced global investment strategy.