Transcript
0:00 Dear PM Modi, I don't know if this will reach you, but this one is for you. We have 35 million NRIs living abroad. These people have sent back home 135 billion dollars last year alone. That's more than what Mexico and China did combine. This is a community that believes in Indian economy. They want to invest back in India, but today the system is so inefficient that it is a mind-numbing exercise for them. First, you need an NRE or an NRO bank account.
0:25 Well, that is fine, but then you need to clear KYC. And if your mobile number is foreign, many platforms simply don't allow you to create an account. OTP does not land, process does not work, window closes. Second, if they want to invest in stocks, they need to have a separate portfolio investment scheme account linked to one specific bank account. Every single trade gets reported to the RBI. They cannot do intraday, they cannot short sell. Third, because of FATCA regulations, most Indian mutual fund houses do not even take money from US or Canada. The paperwork is so high that majority of AMCs have simply opted out. Out of 40 plus mutual fund houses in India, only a few accept US and Canada NRI investments. And some of those still require physical forms, not even digital. Imagine. Fourth and the most difficult one is taxation. NRIs pays TDS upfront on every redemption, even if their actual tax liability is lower. Getting a refund means filing an income tax return from abroad every single year. Now, let's zoom out and understand this. India runs on a current account deficit. FIIs are running away.
1:26 We need foreign capital. So, at a time when India needs dollars coming in, why is there no policy around ease of doing business for these NRIs who are our own people, who wants to put money back in India, in spite of the rupee depreciation? As a nation, we seriously need to solve for this. If you are an NRI, amplify this and share this with a friend.
Summary
- 35 million NRIs contribute significantly to India's economy, sending back $135 billion last year.
- Current banking and investment systems are inefficient, requiring NRIs to navigate complex KYC processes.
- Many platforms do not support foreign mobile numbers, complicating account creation.
- Investment in stocks requires a specific portfolio investment scheme account, with strict reporting to the RBI.
- FATCA regulations limit mutual fund options for NRIs from the US and Canada, with many firms opting out due to high paperwork.
- NRIs face upfront TDS on redemptions, complicating tax refunds and requiring annual income tax returns from abroad.
- The need for foreign capital is critical as India faces a current account deficit, yet policies do not support NRI investments.
- A call to action for NRIs to share their experiences and advocate for necessary reforms.