India's commercial real estate market has become increasingly attractive for Non-Resident Indians (NRIs) seeking to diversify their portfolios. With rental yields of 8-9% in select markets, favourable currency dynamics, and streamlined digital processes, the opportunity is significant — but so are the regulatory intricacies. This guide walks you through everything you need to know.
1. What Can NRIs Buy? FEMA Rules Explained
Under the Foreign Exchange Management Act (FEMA), 1999 and RBI Master Directions, NRIs and PIOs (Persons of Indian Origin) are permitted to purchase commercial property in India — including office spaces, retail shops, warehouses, and co-working units. The only restriction: agricultural land, plantation property, and farmhouses are not allowed without RBI's prior approval.
2. Payment Channels: NRE, NRO & Inward Remittance
All property payments must be routed through banking channels. NRIs can pay from: (a) NRE Account — funds repatriable, ideal for investment; (b) NRO Account — non-repatriable beyond $1M per year with CA certificate; (c) Direct inward remittance from abroad to the developer/seller's account. Cash payments exceeding ₹2 Lakhs are strictly prohibited under Section 269ST of the Income Tax Act.
3. Taxation: What NRIs Pay
Rental income is taxed at slab rates (with 30% standard deduction). Capital gains: Short-term (< 2 years) taxed at slab rates; Long-term (> 2 years) taxed at 20% with indexation benefit. TDS at 20%+ surcharge is deducted on sale. NRIs can claim benefits under the Double Taxation Avoidance Agreement (DTAA) between India and their country of residence to avoid being taxed twice.
4. Power of Attorney (POA) for Remote Transactions
Since most NRIs cannot be physically present for registration, a Power of Attorney (POA) is essential. The POA must be executed on appropriate stamp paper, notarized, and apostilled (for Hague Convention countries) or attested by the Indian Consulate. At Aurevon Realty, we guide NRI clients through the entire POA process and coordinate with the Sub-Registrar's office.
5. Top Locations for NRI Commercial Investment in 2025
Based on yield, infrastructure growth, and tenant quality, the top commercial markets for NRI investors are: Pune (Kharadi, Hinjewadi, Balewadi) — 8-9% yields; Mumbai (Navi Mumbai, Thane) — 7-8% yields; Bangalore (Whitefield, Electronic City) — 7-8.5% yields; Hyderabad (HITEC City, Gachibowli) — 7.5-9% yields.
6. How Aurevon Realty Helps NRIs
We offer end-to-end NRI commercial investment services: curated property shortlisting via video tours, legal due diligence (RERA verification, title clearance), POA facilitation, digital documentation, tenant acquisition, and post-sale property management. Over 200 NRI clients across 15 countries trust Aurevon Realty for their Indian commercial investments.
