The priority for most NRIs is to send money back to India. Remittances by NRIs are among the highest in the world. They naturally want to invest in Indian markets as well. Here are some investment options beyond the usual route of equity, mutual funds and real estate.

1.       Portfolio Investment Schemes (PIS)
NRIs can invest in stocks. But as an NRI, it is not easy to invest in stocks directly. There are ways to invest in equity. One of them is Portfolio investment Scheme (PIS). As an NRI you can open a PIS account either on repatriation or non-repatriation basis and also have an NRE or NRO account to facilitate transactions. This account has to be authorized to be debited for transfer of funds to the PIS account when there is purchase of shares from the secondary market.
Important points to bear in mind –

• The NRI has to give/take delivery of shares when a transaction is made.
• An NRI cannot purchase stock exceeding 5 % of total paid up value of the company concerned.
• Capital gains tax will be applicable on the sale of shares as per the tenure of holding the stocks and will be deducted by the bank selected; the PIS account will be credited with the net amount.
• The amount received by the NRI after a sale can be repatriated out of India or credited to the NRE / FCNR/ NRO account if the shares were purchased on a repatriation basis. If the shares were purchased on a non- repatriation basis, the amount can be credited only to the NRO account.

2.       Portfolio Management Schemes
As an NRI, you can have a portfolio management scheme. Here the provider will build a portfolio of stocks. This typically has a management fee of 2%-2.5% yearly apart from the brokerage and transaction costs. Some providers have a profit sharing contract with the customer.
The advantage is that you can invest in equity, which in the long term offers the best returns. You can also invest in debentures in this scheme.
You have to be careful of the number of transactions taking place in the portfolio, as more transactions will lead to increase in expenses.

3.       Gold ETFs
A Gold ETF is an open ended scheme that helps you to invest in gold. Investors can buy units of this fund and each unit represents a fixed amount of gold. It reflects the price of gold and returns are similar to physical gold investments.
NRIs can invest in gold in India by investing in Gold ETFs. For this they need to open a Portfolio Investment Scheme (PINS) account.  You can buy Gold ETFs without this account also, but then you will have to buy or sell in multiples of 1000 units.

Advantages of Gold ETFs over physical gold:

• They are safer than physical gold which needs to be protected from burglars. Physical gold has to be kept in safes and bank lockers which means higher storage expenses.
• You do not have to worry about the purity of the metal.You have the flexibility to buy as little as you want (1 gram= 1 unit).
• They are liquid and listed which means they can be traded in the stock exchange.

Disadvantages:

• You have to incur management fees for maintaining the accounts.
• Brokerage costs and other expenses will also be incurred
• Some Gold ETFs are not liquid so you should ensure you understand all features before buying a Gold ETF.
• In case of Gold ETFs, long-term capital gains tax is applicable on sale after one year.

4.        Real Estate Mutual Funds
NRIs can invest in Real Estate Mutual funds. The regulations will be similar to investment in Mutual funds. It is a good way to invest in property in India without the hassles involved in management of physical property.
Important points to bear in mind –

• The transactions can be done on a repatriation basis or non-repatriation basis. A debit certificate needs to be provided from the bank on which the cheque is drawn.
• You can use NRE/NRO/FCNR accounts to make the payments. Cheques can be drawn on the NRE account. If NRO/FCNR accounts have to be used, then a rupee draft has to be purchased using money in these accounts. This draft can be used to make payments
• Redemption amount on sale will be paid by a Rupee cheque payable to the NRI or by a foreign currency draft drawn at the rate of exchange prevailing at that time less bank charges

5.         Investment in other products 
Financial markets can become volatile and unstable. Therefore it is important to invest in other products that are not correlated with financial markets. This will help in investment diversification and act as a hedge.

Art:
NRIs can look at investing in art, as it is an investment avenue not affected by market movements. Art can be bought and sold in online auctions, art galleries etc.
Important points to bear in mind –

• It will help in making your portfolio a diversified one.
• You should gain knowledge in the field, understand good and bad art, and know artists and their standing in the market before investing. 
• Trading in works of reputed artists may make quick returns. For lesser known artists, you will have to wait for value appreciation. 
• You will have to incur expenses on the storage and maintenance of art pieces.

Wine:
Fine wine can also be an asset in your portfolio. You can buy from wine brokers. You should be aware of the quality and make of the wine.
Important points to bear in mind –

• It is not affected by volatility in financial markets. With time, the value of wine increases generally.
• Value appreciation depends on demand which cannot be always predicted accurately
• Wine requires proper maintenance and storage
• You cannot understand, analyze and draw conclusions on the wine market easily.

Which assets have you invested in as an NRI? Let us know your experiences on the same.