I am a NRI from Canada who invests in Indian mutual funds. Since about a year ago, Indian mutual funds are not accepting investments from NRI who are residents of either Canada or USA. I cannot understand the logic of these steps either from mutual fund houses or Govt of India for banning investments only from these few countries, while Prime Minister Modi is trying to increase investments from NRIs. Is the Government of India interested only in big investments?
It is true that US persons (citizens as well as green card holders) are being discriminated against since April 2014. This is happening not just in India but in many countries around the world, and is the inevitable result of an extremely unfair and coercive law (Foreign Account Tax Compliance Act: FATCA) that the US Government is enforcing.
You can read our Editor Dhirendra Kumar's article on FATCA here: US NRIs are No Longer Welcome in Indian Financial Businesses.
For financial institutions around the world, the complexity and risk of having Americans as customers is now quite high. Many of them will choose to deal only with select high value clients. It's a rational business decision. We don't think the solution to this lies with Narendra Modi or anyone else outside the US. Americans are suffering because of their own government's methods.
However, there is no reason to do the same against Canadians. Can you give us specific instances of investments being refused in Indian mutual funds because the customer was a Canadian citizen?
This article was originally published on October 15, 2014.
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