3 Ways US & Canada NRIs Can Invest in India (Skip Mutual Funds)

If you're a US or Canada NRI, Indian mutual funds trigger PFIC tax rules that can wipe out 40-50% of your returns. Here are three cleaner ways to get India exposure without the IRS headache.

Route 1 — Direct Indian Stocks via PIS Account
Stocks are not classified as PFIC under US tax law. Normal capital gains rules apply. Open a Portfolio Investment Scheme (PIS) account with any major Indian broker and invest directly in Nifty 50 or Sensex stocks.

Route 2 — India ETFs on US Exchanges
INDA (iShares MSCI India ETF) and SMIN (iShares MSCI India Small-Cap ETF) are US-domiciled. Zero PFIC issues. Buy them from Robinhood, Fidelity, Charles Schwab or any US brokerage — no separate India setup needed.

Route 3 — NRE Fixed Deposits
6.5 to 7.5% interest across top Indian banks. Tax-free in India. Fully repatriable principal and interest. Not exciting, but a strong debt allocation for dollar earners.

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