You're living in Manchester or London, earning in pounds, and thinking about your future in India. Maybe it's retirement. Maybe it's a safety net. Or maybe you just want to grow wealth in the world's fastest-growing major economy.
But here's what stops most UK NRIs: Which account do I need? Will I pay tax twice? Can I bring my money back easily? Is there currency risk?
At Belong, we've spent years helping NRIs answer exactly these questions. Our team has built tools, comparison dashboards, and a community of over 10,000 NRIs who share real experiences. This guide covers everything you need to know about building a diversified India portfolio from the UK - from understanding your residential status to picking the right investment mix.
Let's break it down.
Why Invest in India When You're Based in the UK?
India's GDP grew 8.2% in FY23-24, and according to the IMF's October 2025 World Economic Outlook, it is projected to grow at 6.6% in 2025 and 6.2% in 2026, remaining the fastest-growing major economy through 2026. (source)
For UK NRIs, this presents a unique opportunity.
Here's why it makes sense:
Rupee diversification: Your salary, pension, and savings are in GBP. Investing in India spreads your risk across two economies.
Family support and retirement planning: Many UK NRIs plan to return to India or support family members. Having INR-denominated assets simplifies this.
Tax efficiency: With the India-UK DTAA (Double Taxation Avoidance Agreement), you can structure investments to minimize tax in both countries.
Access to high-growth sectors: India's digital economy, infrastructure, and consumption story offer returns that mature markets like the UK may not.
But investing blindly can be costly. Let's start with the basics.
Understanding Your Tax Residency Status
Before you invest a single pound in India, you need to know: Am I an NRI, RNOR, or resident?
This determines your tax liability in India.
Use the Residential Status Calculator to check your status in under 2 minutes.
NRI (Non-Resident Indian): You've lived outside India for more than 182 days in the financial year. You're taxed only on India-sourced income.
RNOR (Resident but Not Ordinarily Resident): You've returned to India but haven't been a resident in 9 out of the last 10 years. You get partial tax exemptions on foreign income.
Resident: You've been in India for more than 182 days. You're taxed on global income.
👉 Tip: If you're unsure about your status, use our Compliance Compass to check if you're meeting all RBI and tax rules.
The UK-India DTAA: Your Shield Against Double Taxation
The India-UK Double Taxation Avoidance Agreement was signed in 1993 and updated in 2013. It ensures you don't pay tax on the same income in both countries.
Here's how it helps:
Reduced TDS rates: Interest income from India is taxed at 15% (instead of 30%), and dividends at 10% (instead of 20%).
Capital gains relief: Gains from Indian securities may qualify for reduced rates or exemptions under specific treaty provisions.
Pension income benefits: Certain pensions are taxed only in the UK, not in India.
To claim these benefits, you need:
- A Tax Residency Certificate (TRC) from HMRC
- Form 10F filed with the Indian Income Tax Department
- A valid PAN card
According to ClearTax, UK residents can claim a foreign tax credit in the UK for taxes paid in India, preventing double taxation.
Setting Up Your Foundation: Bank Accounts and Documentation
Before you can invest, you need the right accounts and paperwork.
Accounts You'll Need
NRE Account (Non-Resident External): For foreign income. Fully repatriable. Interest is tax-free in India.
NRO Account (Non-Resident Ordinary): For Indian income (rent, dividends, pension). Limited repatriation (up to USD 1 million per year with CA certificate). Interest is taxable.
FCNR Account (Foreign Currency Non-Resident): Keeps your money in foreign currency (GBP, USD, EUR). Protects against rupee depreciation. Interest is tax-free.
Compare the best NRI accounts to see which banks offer online account opening from the UK.
👉 Tip: HDFC Bank, ICICI Bank, and Axis Bank allow full digital onboarding for UK NRIs.
Documentation Checklist
- Valid passport with UK visa
- PAN card (apply here if you don't have one)
- Address proof in the UK (utility bill, council tax statement)
- Bank statement or salary slip
- OCI card (if applicable)
Investment Options That Make Sense for UK NRIs
Now for the exciting part: where to invest.
1. Fixed Deposits (FDs)
FDs are the safest option for UK NRIs. You can open NRE, NRO, or FCNR FDs.
Interest rates: 6.5% to 8.5% depending on the bank and tenure.
Taxation: NRE FDs are tax-free. NRO FDs have 30% TDS (can be reduced under DTAA).
Repatriation: NRE and FCNR FDs are fully repatriable. NRO FDs have limits.
Use the NRI FD Comparison Tool to compare rates across SBI, HDFC, ICICI, and 30+ banks.
Also Read - Which bank is best for fixed deposit in india
2. Mutual Funds
UK NRIs can invest in Indian mutual funds without restrictions (unlike US and Canadian NRIs due to FATCA).
According to WiseNRI, mutual funds offer diversification and professional management, making them a convenient asset class for wealth creation.
Equity funds: High growth potential. Taxed at 12.5% on long-term capital gains (LTCG).
Debt funds: Lower risk. Taxed as per your income slab.
ELSS funds: Save tax under Section 80C (₹1.5 lakh limit).
You can invest through platforms like Zerodha, Groww, or directly with AMCs. Link your NRE or NRO account for transactions.
Also Read - Types of Mutual Funds
3. Stocks and Equities
You can invest in Indian stocks through the Portfolio Investment Scheme (PIS).
Open a demat account with SEBI-registered brokers like Zerodha, ICICI Direct, or HDFC Securities. You cannot do day trading - only delivery-based transactions are allowed.
10% cap rule: You cannot own more than 10% of a company's paid-up capital.
4. Bonds and Government Securities
NRIs can invest in bonds, including:
- Government bonds (G-Secs)
- Corporate bonds
- Infrastructure bonds (tax-free options available)
Interest is taxable, but you can claim DTAA benefits.
Also Read - Can NRIs Invest in Government Bonds and Treasury Bills?
5. Real Estate
Property investment is popular among UK NRIs planning to return. You can buy residential and commercial properties, but not agricultural land or farmhouses (per FEMA guidelines).
Tax implications: Rental income is taxable in India. Capital gains tax applies on sale. Use Section 54 or Section 54F to claim exemptions by reinvesting in another property.
👉 Tip: Consult a CA before selling property. TDS is 20-30% on capital gains for NRIs.
6. Alternative Investment Funds (AIFs)
For high-net-worth individuals, AIFs offer exposure to private equity, hedge funds, and real estate.
Minimum investment: ₹1 crore (about £95,000).
Explore Gift City Alternative Investment Funds for tax-efficient options.
GIFT City: A Game-Changer for UK NRIs
Gujarat International Finance Tec-City (GIFT City) is India's first International Financial Services Centre. It operates like an offshore zone - transactions happen in foreign currency (USD, GBP), and there are significant tax benefits.
Why GIFT City Makes Sense for UK NRIs
Tax-free interest: Interest income from GIFT City FDs is tax-free in India.
No rupee conversion: Invest in USD or GBP, eliminating currency risk.
Full repatriation: Move your funds in and out without restrictions.
Capital gains exemption: Gains from GIFT City securities are exempt from capital gains tax under certain conditions.
According to ICICI Bank, GIFT City operates in foreign currencies, offering a secure and stable environment for NRI investments.
Minimum investment: USD 150,000 for AIFs. However, GIFT City FDs are now available for smaller amounts through Belong's platform.
Learn more: Belong NRI Investment in GIFT City
Currency Risk: The Elephant in the Room
The GBP-INR exchange rate has fluctuated significantly. In 2013, £1 = ₹95. Today, it's around ₹108.
When you invest in INR-denominated assets (like NRE FDs or Indian stocks), you face rupee depreciation risk. If the rupee weakens, your returns in GBP terms shrink.
How to Manage Currency Risk
FCNR FDs: Keep deposits in GBP to avoid conversion risk.
GIFT City investments: Transact in USD or GBP.
Diversify: Split your portfolio between INR and foreign currency assets.
Timing: Some NRIs use forward contracts or hedging strategies (consult a forex advisor).
Use the Rupee vs Dollar Tracker to monitor exchange rate trends.
Repatriation Rules You Need to Know
Repatriation = transferring money from India back to the UK.
NRE and FCNR accounts: Fully repatriable. No limits.
NRO accounts: Up to USD 1 million per financial year. You need a CA certificate stating that taxes have been paid.
Also Read -How to Repatriate Funds from NRO/NRE Accounts
Capital gains, dividends, rent: All repatriable after paying applicable taxes.
Form 15CA & 15CB: Required for remittances exceeding ₹5 lakh. Learn how to file: Filing Form 15CA and 15CB Online
👉 Tip: Keep all tax payment receipts and Form 16A (TDS certificate). You'll need them for repatriation.
Three Steps to Get Started
Step 1: Assess Your Goals
- Are you saving for retirement?
- Do you want regular income (dividends, rent)?
- How much risk can you take?
Use this to decide your asset allocation (FDs, mutual funds, stocks, etc.).
Step 2: Open Accounts and Complete KYC
- Open an NRE or NRO account with a UK-friendly bank (Indian Banks in the UAE have similar processes for UK NRIs).
- Complete your KYC online. Most banks now offer video KYC.
- Apply for a PAN card if you don't have one.
Step 3: Start Small, Diversify Later
Don't put all your money in one asset class.
A sample portfolio for a 35-year-old UK NRI:
- 30% in GIFT City USD FDs (safety + no currency risk)
- 30% in Indian equity mutual funds (growth)
- 20% in NRE FDs (tax-free, liquid)
- 20% in bonds or REITs (stable income)
Common Mistakes UK NRIs Make
Not understanding residential status: This leads to wrong tax filings. Use the Residential Status Calculator.
Ignoring DTAA benefits: You could be paying 30% TDS when it should be 15%. File Form 10F and get a TRC.
Mixing NRE and NRO funds: Keep them separate. Transfers between them have tax implications.
Not keeping records: Save all investment statements, tax certificates, and remittance proofs. You'll need them for NRI tax filing.
Final Thoughts
Building an India portfolio from the UK isn't complicated - but it requires the right knowledge, accounts, and strategy.
Start with safety (FDs), add growth (mutual funds, stocks), and consider tax-efficient options like GIFT City. Use the UK-India DTAA to minimize taxes, and always keep repatriation in mind.
At Belong, we've built tools and a community to make this easier. Compare NRI FD rates, track currency movements with Rupee vs Dollar, and join thousands of UK NRIs in our WhatsApp Community to ask questions and share experiences.
Ready to start? Download the Belong App and explore GIFT City FDs, mutual funds, and personalized investment advice from SEBI-registered advisors.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a SEBI-registered advisor and a qualified CA before making investment decisions. Tax laws and FEMA regulations are subject to change.
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