The Foreign Exchange Management Act (FEMA) regulations govern Non-Resident Indians (NRIs) investing in property in India, providing a clear framework to facilitate real estate investments while ensuring compliance with Indian laws. According to FEMA regulations NRI, NRIs can purchase both residential and commercial properties in India without any specific permission from the Reserve Bank of India (RBI). There is no limit on the number of properties an NRI can acquire for residential or commercial purposes.

However, NRIs are prohibited from purchasing agricultural land, plantation properties or farmhouses. The transactions must be conducted through Indian currency via regular banking channels, following the rules set by the RBI and FEMA.

For payment, NRIs can use funds remitted through normal banking channels or funds held in NRI accounts like Non-Resident External (NRE), Non-Resident Ordinary (NRO) or Foreign Currency Non-Resident (FCNR) accounts. NRIs can also obtain home loans from Indian financial institutions to finance their property purchases, subject to usual loan norms.

When selling property, NRIs can repatriate the sale proceeds of up to two residential properties without seeking any special permission, provided they meet specific conditions, such as holding the property for at least three years from the date of purchase or the date of payment of final installment. Proceeds from the sale of agricultural land, plantation property or a farmhouse are not eligible for repatriation.