Can US‑based NRIs invest in Indian mutual funds?

Summary: US-based NRIs eyeing Indian mutual funds often hit a wall of red tape, but some fund houses still keep the door open. Let’s look at the list of fund houses and how to start investing in their schemes. On the surface, it feels like a straightforward task. If you’re a US-based NRI (non-resident Indians), shouldn’t you be able to invest in Indian mutual funds like anyone else? After all, the money’s yours, the market is familiar and the intent is to participate in India’s growth story. Yet, many mutual fund houses in India have chosen not to accept investments from US-based NRIs. Not because it’s illegal or technically impossible, but because it’s just too much trouble. The problems of complying with FATCA At the heart of this issue lies the Foreign Account Tax Compliance Act (FATCA), a US law that requires financial institutions worldwide to report information about accounts held by US taxpayers. Which means that Indian fund houses that accept investments from US-based NRIs must comply with FATCA by default. As a result, these fund houses have to: build separate reporting pipelines train compliance teams maintain ongoing tax-related disclosures in a very specific format. Add to this the burden of dealing with foreign currency remittances, repatriation processes and maintaining segregated compliance structures, and you begin to understand why many fund houses would rather take the easy route and stay out of it altogether. However, some fund houses are making it easier for US-based NRIs to invest, if you're willing to jump through a few extra hoops. So, how do you go about it to ensure you, as an NRI, can invest in India-based mutual funds? Step 1: Open the right Indian bank account You must invest through either an NRE account (fully repatriable) or an NRO account (for local income). No other accounts work. Step 2: Complete full KYC and submit required documents to the fund house US-based NRIs must

This article was originally published on August 12, 2025.