NRIs/PIOs: India’s valued ambassadors

India has dedicated system to support and connect NRIs/PIOs worldwide. By 2016, there were around 31 million overseas Indians settled across over 200 countries, generating high-value products and services while spreading India’s rich culture.

December 6, 2017

India’s Ministry of External Affairs (MEA) has steadily expanded bilateral agreements with an increasing number of foreign countries to protect the interest of overseas Indians (OIs)

The MEA’s Overseas Indian Affairs (OIA) unit offers a variety of services to aid OIs, comprising Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs)

The NRIs and PIOs serve as a crucial medium for India to promote international relationships focusing on trade and investment, education, culture, health, science and technology

The MEA will celebrate PBD 2018 at Marina Bay Sands in Singapore over January 6-7 to celebrate and further empower OIs in the Association of Southeast Asian Nations (ASEAN) region

Overseas Indians (OIs) in the forms of Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs) are among India’s most diligent ambassadors. At the end of 2016, there were around 31 million OIs settled across more than 200 countries, generating high-value products and services while promoting India’s rich culture worldwide. A steady expansion in the population of OIs and the role they play in India’s collective progress have called for improved services to cater to this emerging demographic, and the Government of India has ably responded to the challenge.

Dedicated unit to serve and connect OIs

India’s Ministry of External Affairs (MEA) has set up a dedicated division, Overseas Indian Affairs (OIA), to provide information, partnerships and facilitations for all matters related to OIs worldwide. Through the unit, the government has also drawn up specific policies and regulations to better connect Indian nationals settled abroad with their motherland. Besides dealing with OIs, the division is engaged in initiatives to promote international relationships focusing on trade and investment, emigration, infrastructure development, education, culture, health, science and technology.

Driven by a mission of development through coalitions in a world without borders, the OIA division has four verticals to handle its diverse scope of services – Financial Services; Emigration Services; Management Services and Diaspora Services. Improvement in the operations of these divisions and their expanding reach worldwide have encouraged a growing number of Indians and OIs to look for new opportunities globally and in India, respectively. This, in turn, has steadily increased contribution to India’s gross domestic product (GDP) as well as to the GDP of foreign countries.

The Indian Government’s main services for the OI community are broadly grouped under:

    • Diaspora EngagementThis division provides OIs with informations on a variety of issues, including national pension scheme for NRIs, offshore voting, scholarships, annual events as well as support in issues related to OIs’ domestic matters .
    • Overseas employmentThe unit provides support to emigrants working abroad or those searching for offshore opportunities. The department maintains an extensive database of recruiting agents, foreign employers and project exporters.
    • WelfareThe division comprises of the Overseas Workers Resource Centre, Migrant Resource Centres and Indian Workers Resource Center. The unit also provides insurance, legal, financial and other compensation assistance.
    • Dialogues and Agreements – This department is constantly expanding and improving bilateral agreements with various countries to protect the interest of expatriate workers and companies on a reciprocal basis. These agreements help workers by providing exemption from social security contributions.
    • Autonomous support – The OIA division is supported by independent non-profit organisations to augment research into migration as well as to support OIs in their philanthropic initiatives.

Tax and investment provisions for OIs in India

The MEA, along with other relevant ministries under the Government of India, has laid out a detailed guide to investment opportunities as well as tax structures targeting OIs. For instance, India’s Income Tax (IT) Department provides a variety of services to non-resident Indians looking to invest in India as well as to those planning to set up business in the country. The regulations also cover India residents dealing with non-residents. The IT and investment provisions for non-residents in India have been detailed under the country’s Income-tax Act, ​Companies Act, Service Tax and  Foreign Exchange Management Act. Besides NRIs, there are separate provisions for PIOs, foreign companies dealing in India and other NRIs.

For details on the facilities:

Similarly, the Reserve Bank of India, the country’s central bank, has drawn up guidelines covering loans in India to non-residents against shares/securities/properties held by them in India. RBI’s rules also cover remittance of assets by a non-resident as well as investments in shares and gold. The Department of Industrial Policy & Promotion under the Ministry of Commerce and Industry has also explained the rules and regulations pertaining to investment by overseas Indians and entities in the Consolidated FDI Policy Circular of 2017.

For details on the facilities:

The deposit schemes designed for OIs give them the option to contribute in either US dollar in the Indian rupee. Deposits by OIs, besides strengthening India’s trade and commerce, have cushioned India’s finances during emergencies such as economic sanctions in the aftermath of the Pokhran-II nuclear tests in 1998. Investments by OIs were also helpful during the financial crisis following the Taper Tantrum in 2013. With OI interest in the Indian economy steadily increasing, the importance of the demographic will steadily improve.

Guidelines for OIs to open bank account in India

NRIs and PIOs can open non-resident accounts with commercial banks in India – Non-Resident Ordinary (NRO) Rupee Account; Non-Resident External (NRE) Rupee Account; Foreign Currency Non-Resident (FCNR) Bank Account. Every major commercial bank in India has dedicated OI unit to serve OI customers looking to invest in India and accounts are mainly provided in joint ownership with a resident Indian. Alongside, RBI has detailed rules on opening, holding and maintaining of accounts in India by a person resident outside India as well as those related to opening, holding and maintaining foreign currency accounts by a person resident in India.

Other investment opportunities for OIs in India

Apart from saving accounts with commercial banks, OIs can also invest in Government Securities, Mutual Funds, Treasury Bills, Stocks and Non-Convertible Debentures/Convertible Debentures, Perpetual Bonds and Exchange Traded Funds (ETF), Money Market Mutual Funds, Real Estate Property, Company Deposits and Bonds issued by Public Sector Undertakings.

One of the most popular means of investment into Government Securities continues to be sovereign gold bonds, or bonds denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The bond, issued by RBI on behalf of the Government, is available through commercial banks. Commercial banks also offer RBI’s saving bonds.

Here are some typical sources of investment into bonds:

Events, honours to celebrate OIs

The MEA celebrates Pravasi Bharatiya Divas (PBD), or Overseas Indians Day, on January 9th every year, alternatively in New Delhi and in a major Indian city, to mark the contribution of the OI community in the development of India. The date is special as it was on this day in 1915 that Mahatma Gandhi, father of the nation, returned to India from South Africa, to lead India’s freedom struggle and altering India’s destiny. In the intervening years, a smaller, outcome-based PBD conferences is held in New Delhi on issues of concern to the Indian diaspora. Indian missions and consulates worldwide also celebrate PBD every year.

Separately, the MEA organises Regional Pravasi Bharatiya Divas (RPBD) periodically outside India to connect with the Indian Diaspora. Besides renewing connections and resolving concerns, these events celebrate the OI community’s achievements and contributions. 

The 10th edition of the Regional Pravasi Bharatiya Divas (RPBD) was held at Singapore over January 6-7. This edition of the RPBD marked 25 years of strategic partnership between India and the Association of Southeast Asian Nations (ASEAN) countries. The conference, themed around “Ancient Route, New Journey: Diaspora in the Dynamic ASEAN INDIA Partnership”, focussed on expanding trade and cultural partnership as well as people-to-people exchanges between India and its extended neighbourhood. The event was attended by India’s Minister of External Affairs, Sushma Swaraj, and Singapore’s Deputy Prime Minister Teo Chee Hean, along with a number of senior politicians from both sides.

During the PBD convention, selected OIs are honoured with the prestigious Pravasi Bharatiya Samman Award (PBSA) award to recognise their contributions in various fields both in India and abroad. The PBSA, conferred by the President of India, is the highest honour conferred on OIs. Besides NRIs and PIOs, the award can also be conferred on an organisation or institution established and run by OIs. The fields covered by the award include:

Below listed are relevant contact details for issues related to OI matters: