Last Updated: Apr 29, 2024 Value Broking 7 Mins 1.5K

The Demat account for NRI is now gaining more attention since the Indian stock market is rising. Many Indians are now investing in the stock market because of their goals regarding their future. However, the concept of investing is still new to many people, and when they want to start trading, they panic due to a lack of knowledge. It is still a simple process for an Indian citizen to open a Demat account and trade in the Indian stock market. Still, NRIs (non-resident Indians) want to invest in the Indian stock market but are unsure.

The Indian stock market is appealing to investors who are not only Indian citizens but also people of Indian origin who live abroad and go out to work. After finishing their studies, they started working overseas. Specifically for non-residents who no longer live in India have multiple questions regarding investing. 

  • Is it possible for them to invest in the Indian stock market? 
  • What are the requirements of the Indian stock market? 
  • How can they open a Demat account for trading and investing in the Indian stock market? 

In addition to the above points, there are still many more questions regarding the NRI Dematerialized account, and the answer is straightforward. Yes, NRIs can trade in the Indian stock market, and yes, many Demat account providers facilitate the Dematerialized account for NRIs.

The Demat account provider does not deny liberty of investment to NRIs and allows the opportunity of a Dematerialized account for NRIs.
rnAs a proud and conscientious citizen of India, you may wonder what India, as a country, is getting in return by allowing Demat accounts for NRIs. Allowing NRIs investment in the Indian stock market is fruitful for the country and the investor. Because, for example:

An NRI from the United States invests in the Indian stock market; the Indian stock market gains investment in dollars; this is how India will gain foreign investment. And for the investor, India is a booming market and a growing economy; investing in firms in a growing economy will be a great deal for investors in the long term. Thus, it is a good time to invest in India since many mini corn and unicorn firms are making it. A mini corn firm is when the valuation of a particular firm is $1 million, and a unicorn firm is when the total valuation of a specific firm is in the billions.

Can NRI Invest in Shares in India Through a Stock Exchange?

Non-residents have permission to trade in the Indian stock market. The RIB [Reserve Bank of India] has allowed NRIs to directly trade in the Indian stock market through the Portfolio Investment Scheme [PIS]. NRIs can change on a delivery basis in India, and they can get hold of shares and debentures of Indian firms through the stock exchange. However, the NRIs aren’t allowed to invest in some securities and stocks.

There are some Specific investments and trading in India that NRIs cannot participate in, like:

  • Intraday trading is not allowed for NRIs, even if they have an NRI Demat account for trading.
  • They are not permitted to trade in a few financial instruments, such as currency derivatives and commodities.

Can an NRI Hold a Demat Account?

The NRI has the right to open an NRI Demat account in India, and some specific Demat account providers give this facility to them. In addition, the RBI has launched the PIS scheme for NRIs, and they can open an NRI Dematerialized account through it. 

The following is some crucial information about the PIS, i.e., the Portfolio Investment Scheme:

  1. If you are a citizen of India and have a portfolio investment scheme, you will be allowed to keep your securities and shares even if you change your citizenship and become an NRI.
  2. Through this scheme, you will get the freedom to invest in shares and bonds of the Indian stock market as an NRI.

Types of NRI Demat Accounts

To buy and sell the shares via a recognized stock exchange, the NRI will have to open an account with a designated bank that has an international presence. 

There are two types of Dematerialized accounts for NRIs:

  1. NRE (Non-Resident External),
  2. NRO (Non-Resident Ordinary).


To invest in a portfolio through the repatriation channel, you must have an NRE (Non-Resident External) account.


To invest in a portfolio through the non-repatriation channel, you need an NRO (Non-Resident Ordinary).

NRIs can open more than one NRE or NRO Demat Account, but they will have to pay the AMC charges for all their Demat accounts.

NRI Demat Account Opening Process

A Demat account opening process for NRIs, like any other Demat account opening process, has specific steps that an investor needs to follow. It may be a little more hectic than the normal process, but it’s not too hard.

The following is the procedure for opening a Demat account for NRI:

  • As an NRI, choose whether you want to open a Demat account and then select the account type for your Demat account between the NRE and NRO types of accounts.
  • Compare the facilities and the prices of the Demat account providers and choose the one that suits your objectives the most.
  • Choose a suitable firm that you wish to invest in.
  • Go to the website of your chosen Demat account provider.
  • Download the NRI Dematerialized account form from the online website of your Demat account provider.
  • Next, you need to submit all the documents mentioned on the website. Ensure all of them are authentic. Otherwise, your Demat account provider may not proceed with your request to open a Demat account.

The above is the standard procedure for opening an NRI Dematerialized account. However, many Demat account providers may have different methods to follow to open your NRI Dematerialized account to trade in the Indian stock market.

Mandatory Documents to Open an NRI Demat Account

The following are some documents that an NRI needs to submit to open a Demat account in India. Those documents are confidential, and every Demat account provider can ask for different types of documents, and the NRI will have to submit them. 

The documents required can change as per the company’s requirements:

Your Current Position in India

  • Birthplace
  • Passport
  • Your Visa

If You Have a Foreign Passport

  • In a foreign passport, the birthplace listed is India.

The Additional Documents

  • You will require PIS permission from your designated bank.
  • The NRE/NRO PIS canceled the cheque.
  • The address proof of an NRI’s legitimate address in a foreign country
  • The electricity bill for the foreign address and any other utility bill such as a telephone bill or rent slip.
  • Photograph of the investor in passport size
  • Signature of the investor

The above given documents are just standard documents. But, as already mentioned before, The requirements for documents can change from one DP to another. And you may even have to submit more documents or even fewer documents than the above.

Always submit the correct documents, and make sure to double-check before submitting them for a smooth process.

Benefits of Dematerialized Account for NRIs

India is a growing market and economy, making it an excellent place to invest; anyone with even a basic understanding of the stock market and investment understands the significance of growing economies and their potential in wealth development. There are numerous benefits, and the biggest one is the chance of making a profit out of the growing market in India. It is like an opportunity for NRIs to invest and make wealth long-term.

An NRI Dematerialized account enables the NRIs to seize opportunities and gain profit from the Indian economy without letting them slip through their fingers.

Frequently Asked Questions (FAQs)

Yes, NRIs can open as many Demat accounts as they like.

The NRIs can compare the facilities provided by the different Demat account providers and choose for themselves.

Yes, the securities can get transferred from the residential Demat account to the NRI Demat account.