In this guide
Many NRIs investing in Indian shares assume that a PIS account is compulsory for every stock-market transaction. Others are told that an NRO non-PIS account automatically permits cheaper brokerage, intraday trading and unrestricted investment.
Both views are oversimplified. The right structure depends primarily on whether the investment is being made on a repatriation or non-repatriation basis. Costs charged by banks and brokers are a secondary consideration.
PIS vs Non-PIS: Basic Difference
| Feature | PIS / Repatriable Route | NRO Non-PIS / Non-Repatriable Route |
|---|---|---|
| Funding | Generally foreign remittance/NRE funds | NRO, NRE, FCNR or permitted inward remittance |
| Sale proceeds | Can qualify for repatriation | Credited to NRO |
| Listed equity delivery | Yes | Yes |
| Cash-market intraday | No | No under current NSE NRI rules |
| F&O | Separate non-repatriation framework | Permitted subject to SEBI rules |
| Bank reporting layer | Higher | Generally simpler |
| Best suited for | Repatriable equity investment | Non-repatriable Indian investments |
The RBI’s current foreign-investment framework separately recognises listed-equity investment by NRIs/OCIs on a repatriation basis and investment on a non-repatriation basis.
What Is a PIS Account?
For listed Indian shares purchased on a repatriation basis, RBI requires the transaction to be routed through a designated authorised-dealer branch. The relevant NRE account is designated as an NRE (PIS) account. Net sale proceeds can be remitted outside India or credited back to that NRE(PIS) account.
PIS is therefore particularly relevant where an NRI wants the investment to retain its repatriable character.
There are also specific holding limits.
For this repatriation-basis route:
- One NRI/OCI generally cannot hold more than 5% of the company’s fully diluted paid-up equity capital.
- All NRIs/OCIs together generally cannot exceed 10%.
- The aggregate 10% limit can be increased to 24% where the prescribed corporate approval is obtained.
So the frequently quoted “10% per individual NRI” rule is incorrect for this route.
What Is NRO Non-PIS?
“Non-PIS” is commonly used by brokers for NRI investments made through an NRO-linked trading/demat setup on a non-repatriation basis.
Under RBI’s Schedule IV framework, an NRI or OCI can purchase Indian equity instruments on a non-repatriation basis, including through a stock exchange. Sale proceeds are credited to the investor’s NRO account.
This route can remove some of the additional banking and transaction-reporting layers associated with PIS.
However, the claim that it always saves ₹50,000, ₹1 lakh or ₹2 lakh a year should not be treated as a tax or regulatory fact. Brokerage, bank reporting charges, account-maintenance charges and transaction fees are provider-specific and can change.
Compare the actual tariff sheets of the bank and broker before switching.
Can NRIs Do Intraday Trading Through Non-PIS?
This needs an important correction.
The current NSE NRI trading FAQ expressly states that an NRI cannot undertake intraday transactions in the cash equity segment. Shares purchased must be taken into delivery, and shares sold must be delivered. Short selling is also not permitted.
Therefore, an NRO non-PIS account should not be marketed as a general route for equity cash-market intraday trading.
SEBI did issue a significant circular on 29 July 2025 concerning operational efficiency in monitoring NRI position limits in exchange-traded derivatives. That reform relates to the derivatives monitoring framework; it did not create a general permission for NRI cash-equity intraday trading.
Can NRIs Trade in F&O?
Yes.
NSE confirms that NRIs can participate in the Futures & Options segment using rupee funds held in India on a non-repatriation basis, subject to applicable SEBI position limits.
SEBI’s 2025 reforms also simplified the mechanism used for monitoring NRI positions in exchange-traded derivatives.
Therefore, do not confuse:
F&O trading on a non-repatriation basis
with
cash-market intraday trading.
They are not the same permission.
Is the USD 1 Million Limit a Non-PIS Rule?
No.
The USD 1 million facility arises from the broader FEMA framework governing NRO balances and remittance of eligible assets.
RBI permits NRIs to remit up to USD 1 million per financial year from eligible NRO balances/sale proceeds of assets, subject to applicable conditions, documentation, taxes and satisfaction of the authorised dealer.
Current income such as rent, dividend, pension and interest has a separate remittance treatment and is not simply part of the capital-remittance ceiling.
Accordingly, calling NRO non-PIS investments “fully repatriable up to USD 1 million” is too loose. The securities are acquired on a non-repatriation basis, their sale proceeds flow to NRO, and any later outward remittance must independently satisfy the applicable FEMA remittance provisions.
Can NRIs Hold Both PIS and Non-PIS Investments?
Yes, different investment buckets can coexist where correctly structured.
An NRI may want:
- Repatriable listed equity through the appropriate NRE/PIS route;
- Existing resident-era shares held on a non-repatriation basis;
- Fresh non-repatriable equity through an NRO-linked structure; and
- F&O exposure under the applicable non-repatriation framework.
What matters is maintaining the correct banking, demat, KYC and FEMA classification for each category.
NRE Joint Account With a Resident Relative: Another Common Myth
It is also incorrect to say that a resident Indian can never be associated with an NRE account.
RBI permits an NRE account to be held jointly with another NRI/OCI and also permits a resident relative as joint holder on a former-or-survivor basis, subject to the prescribed operating restrictions. NRO accounts may similarly be held with residents under the permitted structure.
Which Route Should an NRI Choose?
Choose based on regulatory purpose rather than brokerage alone.
PIS/repatriable route may be appropriate when: freely repatriable listed-equity investing is a priority.
NRO non-PIS may be appropriate when: investments are intentionally held on a non-repatriation basis and a simpler NRO-linked setup is preferred.
For F&O: use the permitted non-repatriation structure and comply with SEBI limits.
For cash intraday: current NSE guidance does not permit NRI intraday transactions.
Frequently Asked Questions
Is PIS compulsory for every NRI investment?
No. RBI separately permits NRI/OCI investment on repatriation and non-repatriation bases.
Can an NRI do equity intraday through NRO non-PIS?
Current NSE guidance says no. Cash-segment NRI transactions require delivery.
Can an NRI trade F&O?
Yes, using rupee funds in India on a non-repatriation basis, subject to SEBI requirements.
Is the individual NRI shareholding limit 10%?
For listed-equity investment on the RBI repatriation route, the individual limit is generally 5%, while the aggregate NRI/OCI limit is normally 10%, potentially extendable to 24%.
Is non-PIS always cheaper than PIS?
It may involve fewer banking/reporting layers, but actual brokerage and charges depend on the bank and broker. There is no universal statutory ₹50-versus-₹200 pricing rule.
Do mutual funds require PIS?
PIS is principally a listed-equity repatriation framework. RBI separately permits qualifying mutual-fund investments through permitted NRE/FCNR/NRO funding routes, so an NRI does not need a PIS account merely to invest in ordinary mutual funds.
