NRIs / PIOs / OCIs – FREQUENTLY ASKED QUESTIONS

The Constitution of India does not allow holding Indian Citizenship and Citizenship of a foreign country simultaneously. Therefore, by amending the Constitution, a new category of citizenship i.e. Overseas Citizen of India (OCI) was created as a compromise to dual citizenship. According to the 14th Report of the Parliamentary Standing Committee on External Affairs tabled in Parliament, it is reported that nearly 8 lac persons of Indian origin have been conferred the status of Overseas Citizen of India (OCI) upto November 2006. This Committee’s recommendation that the Government “explore the feasibility of extending the benefit of voting rights” to OCIs has been debated in Parliament. However, the fact remains that both Article 9 of the Constitution of India and Section 9 of the Indian Citizenship Act categorically prohibit dual citizenship and holding of two nationalities simultaneously of two different countries. Section 7 B of the Constitution specifically prohibits political and other rights to OCIs who have only multiple entry life-long visa facility for visiting India for any purpose any time. In the face of such a situation, conferring of political rights under the present system to OCIs may yet be a distant dream.

Registration of Person of Indian Origin (PIO) Card holders started under the Ministry of Home Affairs Scheme of August 19, 2002, whereas the OCI Scheme became operational from December 2, 2005. Now, both the schemes have been merged and only OCI scheme remains enforce. What is then the difference between an NRI, a PIO and an OCI. A description of the terminologies answering frequently arising questions in these array of nomenclatures may be useful to summarise as follows:

·      NRI : Section 2 of the Foreign Exchange Management Act 1999 (FEMA) defines a person resident in India and a person resident outside India but does not define the term NRI. However, a notification defines NRI to mean a person resident outside India who is either a citizen of India or is a person of Indian origin. Under FEMA, a person “resident” in India is one who resides in India for more than 182 days in the preceding financial year and who comes or stays in India for any purpose and a “non-resident” is merely defined as a person who is not a resident in India. Therefore, an NRI can be summed up as an Indian citizen who is ordinarily residing outside India and holds an Indian passport. 

·    PIO: It means a foreign citizen who at any time held an Indian passport; or he/she or either of his /her parents or grand parents or great grand parents was born in and was permanently resident in India; or he/she is a spouse of a citizen of India or of a person of Indian origin. PIO card holders can visit India without visa for 15 years and will be required to register with Foreigners Registration Officer (FRO) in India when the stay exceeds 180 days continuously. PIOs enjoy parity with NRIs in respect of certain facilities but have no political rights and can apply for Indian citizenship after residing in India for a minimum of seven years.

·     OCI: A foreign national who was eligible to become a citizen of India on January 26, 1950, or was a citizen of India on or at any time after the said date or belonged to a territory that became part of India after August 15, 1947 and, his / her children and grand children are eligible for registration as OCIs. They enjoy multiple entry multipurpose life long visa for visiting India, are exempted registration with FRO/police authorities for any length of stay in India and are entitled to benefits notified under Section 7 B of the Citizenship Act. An OCI registered for 5 years and residing in India for one year can be granted Indian citizenship but have no political rights.

NRIs / PIOs are permitted to open bank accounts in India out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India. These accounts can be opened with banks authorized by the Reserve Bank of India and there are three types of non-resident accounts:

·         Non-Resident (External) Rupee Accounts (NRE Accounts)

·         Ordinary Non-Resident Account (NRO Accounts)

·         Foreign Currency Non-Resident (Bank) Accounts (FCNR (B) Accounts

The report of the above Parliamentary Committee revealed that nearly half of the total NRI remittance of Rs.55,000 Crore came from the Keralite NRIs. There can be no guesses to say that the remaining half may have come from Punjab which contributes significantly to the total of 25 million NRIs living in 110 countries abroad. Besides, the Government has provided a liberalized policy frame work for investment by NRIs. The Commerce and Industry Minister Kamal Nath has recently gone on record to state that Foreign Direct Investment inflows in India jumped nearly three-fold to 15 billion US dollars in 2006-07. In the face of such a buoyant surge, a plethora of Indian taxation and Foreign Exchange Laws need simplification as they impede and retard foreign investment.  The classifications of NRI, PIO and OCI themselves make foreigners of Indians. May be a time has now come to enunciate clear dual citizenship to foreign Indian citizens as they are without alienating them.