Top Passive Income Investments for NRIs in India

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India became the 4th largest global economy in 2025, with a real GDP growth rate of 6.5% (Source: PIB). It is also projected to be the world’s fastest-growing major economy. This growth is also visible in India’s financial markets and investment ecosystem.

As the economy expands, it creates more opportunities for investors to earn income from assets such as bonds, dividend-paying stocks, and real estate. For NRIs, these investments can serve as a way to build passive income while staying connected to India’s economic growth.

Passive Income Investments for NRIs in India

Here are some passive income investments for NRIs in India: 

• Investment-Grade Corporate Bonds

Investment-grade bonds may be a suitable passive income investment for NRIs in India. Issued by corporations and companies, these are debt securities with a high credit quality, offering potential returns of up to 14%-15% (Source: Livemint).

In India, investment-grade bonds carry a high credit rating of AAA to BBB-. These ratings are issued and evaluated frequently by credit agencies like CRISIL, CARE, and ICRA after evaluating the creditworthiness of the issuer.

Investment-grade bonds may offer relatively stable passive income to NRIs through fixed income payments at regular intervals until the principal is returned at maturity. 

• G-Secs

Earlier, G-Secs investments were only open to resident Indians. But in 2020, the Indian government introduced the FAR (Fully Accessible Route) that allows NRIs to invest in G-Secs without any upper caps. 

Backed by the sovereign guarantee, G-Secs or government securities are low-risk debt securities with varied maturities ranging from 91 days to 40 years. G-Secs include:

• T-bills
• Dated government bonds
• Municipal bonds
• State development loans (SDLs)

Since these securities are backed by the Indian government, they carry relatively low default risks. In fact, in August 2025, S&P Global upgraded India’s sovereign credit rating to BBB with a stable outlook. This rating upgrade increases the perceived reliability of G-Secs further. 

That said, the returns may also be potentially lower than corporate bonds. The minimum investment amount is Rs. 10,000, and NRIs need Non-PIS NRO accounts to invest in G-Secs.

• Fixed Deposits

Just like millions of resident Indians who use FDs as sources of passive income, NRIs too can add them to their portfolio for the same purpose.  In fact, according to the RBI, NRI deposits in India rose by nearly 10% in FY2025 (source: IBEF).

FD options for NRIs depend on whether they are investing foreign income or Indian earnings. Another consideration is the possibility of repatriating funds and how they are taxed. 

Here’s a quick breakdown of FD options as passive income investment options for NRIs in India:

• NRE FDs (Non-Resident External)

• For overseas earnings that are converted into Indian rupees 
• Both principal and interest earned are tax-free in India
• Completely repatriable

• NRO FDs (Non-Resident Ordinary)

• For income that’s earned in India (like rent or dividends from Indian stocks)
• Interest earned on the deposit is taxable
• Funds of up to USD 1 million/financial year are repatriable 

 

• FCNR FDs (Foreign Currency Non-Resident)

• For investments in foreign currency
• May help protect against exchange rate fluctuations
• Principal and interest are tax-free in India and completely repatriable

Dividend-Paying Stocks

Over the last 10 years, the Nifty 50 index has offered returns of 13.88% (Source: NIFTY Indices), while the S&P 500 has delivered returns of 13.05% (Source: S&P Global) in the same period. This indicates that the expanding equity markets of India have displayed a slight upper hand as compared to the markets of developed countries.

Among the various investment options available in Indian equities, investing in dividend-paying stocks may be a suitable choice for NRIs looking for passive income investments in NRIs. Investing in dividend-paying stocks of well-established Indian companies means:

• Regular dividend payments 
• Possibility of capital appreciation 

Real Estate

For NRIs, Indian real estate has always been a preferred investment route. And this is backed by real growth as well.

The Indian real estate market has grown at a CAGR of 25.6% between 2020 and 2025 (Source: Data Insights Market). This growth has been driven by growing urbanisation and demand for homes in especially Tier 1 and Tier 2 cities. 

So, NRIs searching for passive income investments in India may consider investing in real estate assets like residential properties and commercial office spaces to generate rental income. 

To avoid directly owning and managing properties, NRIs may consider investing through Real Estate Investment Trusts (REITs). Here’s what NRIs need to know about REITs:

• Work like mutual funds to pool money and invest in real estate assets
• The properties are leased out, and the REIT generates rental income from them
• As per SEBI, REITs must distribute at least 90% of their rental income as dividends
• NRIs can invest in REIT IPOs or through the secondary market
• NRIs need an NRO/NRE account and a Demat account for investment

Choosing Passive Income Options Based on Risk Appetite

Now, not all the passive income investment options for NRIs in India carry the same risk. Here’s how different investment options for NRIs map against different risk profiles and objectives:

*Disclaimer: This table is for illustrative purposes only. Please do not construe this as investment advice. 

Getting Started With Investment Options for NRIs in India 

So, there are multiple investment options for NRIs in India that offer regular cash flows. These include:

• Debt securities like G-Secs and investment-grade corporate bonds
• Equity investments in dividend-paying stocks and equity REITs
• Fixed-income options like NRE, NRO, and FCNR FDs

Now, the choice depends on the NRI’s investment goals, risk appetite, and time horizon. For instance, if you have a low-risk appetite and need a regular income as an NRI, you can consider AAA-rated NRI-eligible bonds through the GoldenPi platform. 

FAQs on Passive Income Options for NRIs in India

1. What are some of the most suitable passive income options for NRIs in India?

The most suitable passive income options for NRIs in India depend on their risk appetite and broader investment objectives. That said, some good options may include:

• Investment-grade corporate bonds
• FDs
• G-Secs
• Dividend-paying stocks
• Real estate

2. Is passive income earned by NRIs in India taxable?

Yes, if the passive income is earned, accrued, or received in India, it is taxable in India. This includes interest earned from FDs, bond interest, rental income from property, and dividends from companies.

However, some passive income sources like interest earned from NRE accounts and FDs are tax-free in India. If a DTAA (Double Tax Avoidance Agreement) exists between India and the NRI’s resident country, they can use it to claim tax credit. 

3. Which NRI account do I need to invest in India?

NRIs need an NRE or NRO account to invest in India. Apart from that, they may also need a Demat and trading account for certain investments, such as investing in equities. 

4. Why should NRIs consider building passive income in India?

NRIs may consider investing in India for passive income because:

• India offers a higher yield advantage than developed markets
• India offers favourable repatriation rules (NRE and FCNR accounts)
• India has DTAA with several countries for smoother tax processing
• With different sector drivers, interest rates, and market cycles, Indian markets may show a lower correlation with the home markets of the US/UK

Disclaimer:

This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the securities market are subject to market risks. Read all the offer-related documents carefully before investing.

Bonds or non-convertible debentures (NCDs) are regulated by the Securities and Exchange Board of India and other government authorities. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.