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What is meant by NRI trading and its procedure?

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NRI (Non-Residents India) traders often finds it difficult to participate and trade in Indian stock market because of various reasons.The main reason among all is lack of awareness about NRI trading and complications associated with NRE and NRO accounts. Pehla trade understand this need of traders and facilitates NRI trading to citizens residing outside India.NRI's are free to trade in equity, commodity, ETF's, futures and options but not in currency.


To trade in Indian stock market , RBI has made it mandatory to open a NRI trading account with any institution which is authorized by RBI itself. Investors can open either NRE or NRO accounts to begin their investment. Following are some difference between NRE and NRO trading account:

1)Any NRI can open NRE account and they may repatriate all capital and interest earned by them at any point of time. They also do not need to pay any tax, however the case with NRO account holders is quite different. Here account holders can repatriate only up to $1 million in a year which includes principle and interest as well.

2) Tax implications on both types of account is different.NRE accounts are tax free whereas NRO accounts are not.

3) NRE account can be held jointly with another NRI but not with India citizen. NRO account can be held jointly with NRI and Indian citizen both.



NRI trading account types

1)PINS (Portfolio Investment Scheme) account

This account type is used for buying selling of equities in Indian stock market. NRE PINS account types allows investors to repatriate their capital to foreign countries, NRO PINS account does not allow this capital repatriation.

2) Non PINS (Portfolio Investment Scheme) account

This account type is used to invest in IPO's or MF's. Non PINS are also of two types and NRE Non PINS transactions can be repatriated , transactions made through NRO Non PINS can not be repatriated but it allows trading in options and futures.


Note: A NRI who is having a NRE account needs to have a separate PINS account to trade in equities and at a time a NRI can have only one PINS account.

How a NRI can start trading in Indian stock market is discussed below:

1)Open NRE/NRO account with any bank authorized by RBI.

2)Ask bank to issue a PINS letter.

3)Connect this PINS letter issued by bank with broker and open your trading account.

4) From your saving account of bank allocate fund to PINS account.

5)Using this fund you can trade and all profit & loss will be settled in your PINS account at the end of the day.


We at Pehla trade facilitates traders to open free demat account with us in just 15 minutes.To our NRI clients we offer the same trading platform which we offer to Indian clients along with all necessary trading tools. You can join us to save your huge brokerage cost and trade with efficiency using our smart trading platform and tools.
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