It is better to invest in a growing economy. Hence Indian shares, debentures and mutual funds are in great demand among the Non resident Indians. There is great scope for Indian shares, debentures, mutual funds and real estate market too. Non resident Indians are finding real estate investment in India lucrative too.

Three types of accounts required for NRIs are:

NRE investment account 
NRO investment account 
FCNR account for certificate of deposits

Real estate mutual funds offer them better appreciation value. India has been victorious over other Asian countries in the mutual fund market. Therefore, more and more NRIs are investing in Indian funds. Coupled with this, is the fact that an NRE or Non Resident External income is not taxable according to RBI. You also get to transfer the profits or interest earned in the NRE accounts.

You can make direct investments in companies, partnership firms in your hometown. Invest in stock exchanges and build your portfolio through shares and debentures. Create an FCNR account to have a certificate of deposits or any other investments with a maturity period. These accounts are held from one year to five years, basically till the period of maturity.

Your investments can be made through NRO and NRE accounts. It is allowed to make investments through both repatriation and non repatriation basis. But, if you want to transfer abroad, your income earned through shares, debentures, mutual funds, rental income then you must opt for NRE account. NRO account allows you to make investments but you cannot transfer the income earned abroad.