NRIs, OCI Cardholders, and Diaspora Body Request India’s F.M. to allow them to invest in the Indian Stock Market
One of the leading Indian diaspora bodies, the Foundation for India and Indian Diaspora Studies (FIIDS), urged India’s finance minister, Nirmala Sitharaman, to allow NRIs and OCI cardholders to directly invest in India or invest in the Indian stock markets.
The request came during Nirmala Sitharaman’s visit to the United States, where she attended the annual meetings of the World Bank and the International Monetary Fund. During her visit, she also met the leaders of power and politics, including high-rank officers of the Biden administration and many other representatives of the Indian community in the U.S. She also invited the U.S. – based Indian diaspora to share their views and ideas on strengthening the socio-economic growth of both countries.
Members of FIIDS claimed that the initiative would help fuel the Indian economy as foreign investments would flow into the country. FIIDS had also conducted a survey that witnessed 88% of NRIs and OCI/PIO cardholders support this idea.
Currently, NRIs can only invest in Indian companies through a Portfolio Investment Scheme (PIS) by the Reserve Bank of India. The scheme allows them to invest in Indian companies under repatriation or non-repatriation through a registered stockbroker. The PIS scheme also permits NRIs to invest in mutual funds in India from abroad, provided they fulfill specific regulations.
The number of regulations acts as a hurdle for these NRIs, preventing them from making any direct investment in the Indian market.
FIIDs U.S.A. also urged India’s Finance Minister to expand the Double Tax Avoidance Agreement (DTAA) to help NRIs and OCI cardholders avoid paying double taxes in the U.S. on the income earned or investment taxed in India.
They also urged Sitharaman to initiate an agreement with the Biden administration on the social security program. Many Indians who worked in the United States on H1B visas have returned to India. At the same time, U.S citizens of Indian origin continue to receive the benefits even after migrating to India or any other country. NRIs will potentially lose their Social Security number (SSN) withheld on their income by the Internal Revenue Service (IRS) if they return to India without fulfilling the payout conditions. At present, NRIs have contributed more than $25 billion to the social security fund held by the Internal Revenue Service (IRS). Over 80% of the participants favoured the proposal by FIIDs USA.
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