Understanding PIS vs Non-PIS for NRI investments
- 6 days ago
- 2 min read
The #1 barrier for NRIs while investing in India isn’t returns but compliances (like PFIC rules for US NRIs) & access (limited choices). Investing in Indian equities is complicated for NRIs, no matter which country you're in.
Just like NRI banking has two accounts - NRE (money from abroad) and NRO (money earned in India) - your demat account has variants too.
PIS and non-PIS, explained
PIS (Portfolio Investment Scheme) route is an older mechanism that needed special RBI approval and every trade gets reported. It’s a bit complicated and costly.Â
So, RBI introduced the non-PIS route to simplify this process. But RBI, FEMA, bank, broker and a few use cases have kept the PIS route alive.
Here's when each actually makes sense:
NRE-PIS: You earn abroad, invest in Indian stocks, plan to send gains back overseas.
NRE non-PIS: You earn abroad, want full repatriation, simpler process since you're not actively trading stocks (mutual funds, IPO shares, ESOP).
NRO-PIS: You earn in India (rent, pension, freelancing), invest in equities and might move money out later (capped at $1M/year after taxes).
NRO-Non-PIS: You earn in India, planning to return and want money to compound here.
The bigger picture
NRI money has layers. Your banking account connects to your investing account. Your investments connect to your tax situation. Your tax situation connects back to compliance in both countries.
It’s not a one-size-fits-all approach. Your salary, repatriation needs, and return plans make your strategy unique.
Note: As of Budget 2026, the investment caps also widened. An NRI can now hold up to 10% of a single listed company's paid-up capital individually (up from 5%), with all NRIs together capped at 24% of the company. A direct PIS route for overseas investors was also opened. RBI is still operationalising some of this, so confirm current timelines with your bank.