Special Status & Incentives to NRIs, OCIs & PIOs by Govt. of India
Recognizing their contribution to their motherland- India, The Govt. of India has given substantial rights to PIOs and has given the option to become Oversea Citizens of India Cardholders (See – Eligibility and benefits for OCI Cardholder). Govt. of India has also set up Ministry of Overseas Indian Affairs to provide them a common platform and to protect their common interests in India & abroad. Now along-with the Central Govt., the State Governments have well understood their contribution and their potential in the development of their Home States. These states are now holding their annual gatherings. They have become natural stakeholder partners in the development of their Home State because of their spirit of belonging to their motherland /their state/ their native place. These Indians have made immense contribution to the development of their respective state particularly of their native place through remittances, FDIs inflow and sharing of knowledge, technology, entrepreneur-skill, networks and vast world market.
In India, it is felt that there is a still higher scope for the oversea Indians to further step up their level of engagement with India. Their entrepreneur-skill, global experience, knowledge of latest technology, overseas network and their exposure & access to international market would be the facilitators to upsurge the manufacturing and R&D activities in India. Such production base would facilitate the import substitution & would add to exports from India. India would truly become the manufacturing and R&D hub on the World- Map along-with its present lead position in IT, ITES and Service Sector.
India has always rolled out the Red Carpet for its Overseas Indians upto its shores. India through FDI policies, RBI guidelines and provisions of FEMA has given them preferential treatment and endeavored to reciprocate their contribution to the development of India.
Incentives to NRIs, OCIs & PIOs:
A. Preferential treatment Under FEMA, RBI guidelines & FDI Policy: (See – Investment Options for NRIs, OCIs & PIOs in India)
- NRIs and OCIs including a company, a trust and a partnership firm incorporated outside India and owned and controlled by NRIs or OCIs are entitled to invest upto 100% of the capital of a Company/ LLP/ Partnership Firm/ Proprietorship Concern or upto 100% of each of the Series of Units/ Investments/ debentures etc. of such entities/Investment vehicles on non repatriation basis. They can sell the same also. Their such investments would be through automatic route without any permission. Further such investments are at Par with the investments by Indian residents.
- NRIs and OCIs can make the purchase/ sale of shares, units, debt instruments etc. upto limit and in the manner prescribed under FEMA, RBI guideline or FDI Policy.
B. Flexibility in opening & operations of Bank Accounts and Incentives for such Bank Accounts:
NRIs, OCIs and PIOs can open bank account in India either in INR (NRE Account) or in the currency of their host country or in any other currency of their choice (FCNR(B) Account) (See- Bank Accounts by NRIs, OCIs & PIOs) and maintain the account in that currency to avoid any currency fluctuation loss. The interest income on NRE account is exempt from Income Tax and the balance in the NRE accounts is exempt from wealth Tax. (See – Operations & Incentives to NR- Bank Accounts)
C. Incentives under Indian Statues:
Indian Income Tax Act and other Indian Statues have given no of incentives to NRIs/OCIs/ PIOs and their investments in India. The Govt. of India and State Governments are offering incentives to encourage NRIs/OCIs/ PIOs to set up industries/ business ventures in India.
D. Incentives to OCI Cardholders
The Govt. of India has given no. of rights to the OCI Cardholders. ( See – Eligibility & Incentives to OCI Cardholders)