Actually Neha, there are quite a few regulations that they have to follow while they invest in real estate back home in India. You may have heard of FEMA which stands for Foreign Exchange Management Act. Under this, RBI has simplified the NRI investment method and any NRI or PIO (person of Indian origin) can purchase/acquire immovable Indian property other than agricultural property. People who are citizens of Bangladesh, Pakistan, Afghanistan, Iran, Nepal, China, Sri Lanka or Bhutan cannot acquire/transfer immovable Indian property except maximum 5-year leases without RBI permission. This is one rule that I know.
Also, going by the guidelines of the Government in case of NRI property deals, some other points have to be noted. NRIs or PIOs can make their payments from funds which have been remitted to India via banking avenues or funds which are kept in NRE/NRO/FCNR (B) accounts in India. They cannot pay through foreign currency or traveler’s cheques. Payments may not be made outside the country also. Eligibility for home loan will depend on factors like regular home loans but repayment can be through the banking channel, debit from the NRO/NRE/FCNR (B) account or even from rental income out of the said property. It can also be done by close relatives of the NRI borrower through their Indian accounts. So these are few things that NRI investors must remember before venturing into Indian real estate by themselves.