Policy Update
Arjya Shree Pande
Background
The National Pension System (NPS), regulated by the Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act, 2013, was expanded to Non Resident Indians (NRIs) in 2015 to broaden access to a structured, market linked retirement savings mechanism. NPS was initially introduced for Central Government employees effective 1 January 2004 and extended voluntarily to all Indian citizens from 1 May 2009 under the All Citizen Model. The specific expansion enabling NRIs to subscribe occurred through amendments to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.
The policy was driven by the need to address the lack of formal old age income security options for India’s large diaspora. With millions of NRIs residing abroad, many lacked portable, regulated, low cost pension products linked to India that allowed contributions from overseas funds while ensuring repatriability of benefits.
The rationale, as stated by the Reserve Bank of India (RBI), was to enable NRIs’ access to old age income security by making NPS an eligible investment under the Foreign Exchange Management Act (FEMA), 1999, in consultation with the Government of India (RBI, 2015). Before 2015, regulatory restrictions under FEMA prevented NRIs from freely subscribing to NPS. The 2015 reform filled this gap by allowing NRIs to join the scheme through banking channels, thereby integrating the diaspora into India’s voluntary pension architecture (RBI, 2015).
Key objectives include promoting retirement savings among NRIs through a transparent, flexible, and low cost defined contribution scheme; ensuring contributions can be made via normal banking channels from (NRE) Non-Resident External Account, is a rupee-denominated savings or fixed deposit account that NRIs can open in India to park foreign earnings. Both the principal and interest are fully repatriable, and the interest earned is tax-free in India, (FCNR) Foreign Currency Non-Resident Account is a fixed deposit account maintained in foreign currency (such as USD, GBP, EUR, etc).
It protects the depositor from exchange rate fluctuations, and both principal and interest are fully repatriable, or (NRO) accounts Non-Resident Ordinary account is a rupee denominated account used by NRIs to manage income earned in India (such as rent, dividends, or pension). Repatriation is restricted (subject to limits and documentation), and the interest earned is taxable in India, or inward remittances; and allows unrestricted repatriation of the annuity or accumulated savings.
The implementation timeline centres on 2015: the RBI notified the Ninth Amendment Regulations on 6 October 2015 (FEMA.353/2015-RB), followed by the operational circular dated 29 October 2015 clarifying that NRIs may subscribe provided they meet PFRDA eligibility and use banking channels. NRIs eligible for NPS must be Indian citizens residing abroad and aged between 18 and 85 years. They must comply with PFRDA’s prescribed KYC norms at the time of registration. OCIs are also eligible on the same terms, while (PIOs) Person of Indian Origin and (HUFs) stands for Hindu Undivided Family remains ineligible. As HUFs are joint family entities, not individuals, so they cannot open an NPS account.
PIOs lack Indian citizenship or OCI status and have therefore been kept outside the eligibility criteria by PFRDA. Contributions can be made only through NRE, FCNR or NRO accounts or inward remittances.
PFRDA subsequently issued revised guidelines on contribution collection and service charges for NRI accounts in January 2016 (PFRDA, 2016).
Target beneficiaries are Indian citizens who are NRIs (and, later, Overseas Citizens of India), aged between 18 and the prevailing upper limit up to 85 years, who comply with Know Your Customer (KYC) norms.
Key provisions include full repatriability of benefits subject to FEMA, and specific documentation (recent photograph, PAN, Indian passport for NRIs or OCI card, Indian/foreign address proof, and NRE/NRO bank proof). Enrolment is possible digitally via eNPS or through Points of Presence (PoPs) in physical/online modes (PFRDA).
Amendments and updates include the 2019 extension of eligibility to Overseas Citizens of India (OCIs) at par with NRIs, following a Government notification under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and the corresponding PFRDA circular of 29 October 2019. Subsequent refinements have covered KYC processes for digital onboarding of NRIs/OCIs, contribution norms, and alignment with evolving exit/withdrawal regulations, while preserving the core repatriability and Tier-I focus (PFRDA, 2019; PIB, 2019).
Functioning
The (NPS) for (NRIs) and (OCIs) operates as a voluntary, defined contribution individual pension account under the All Citizen Model. Subscribers open a Permanent Retirement Account Number (PRAN) and make contributions that are invested across asset classes (equity, corporate bonds, government securities) according to their chosen Active or Auto (lifecycle) allocation and selected Pension Fund. Benefits (lump-sum and annuity) are fully repatriable subject to FEMA guidelines. NRIs and OCIs are restricted to Tier-I accounts; Tier-II is not available to them (PFRDA).
PFRDA has specifically barred NRIs and OCIs from opening Tier-II accounts to keep the product focused on long-term retirement savings. Withdrawals and exits follow the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, with annuity purchase requirements at maturity or premature exit (PFRDA). NPS for NRIs requires a minimum contribution of ₹500 to open the account and at least ₹1,000 in a financial year to keep it active (PFRDA). Contributions made from an NRE account are fully repatriable, allowing the corpus and benefits to be sent abroad later, whereas funds from an NRO account are non-repatriable (RBI, 2015).
The institutional framework is deliberately unbundled to minimise costs and conflicts of interest. PFRDA is the statutory regulator. NPS Trust, constituted under the Indian Trusts Act, holds assets for subscribers and oversees operational and investment activities. Central Recordkeeping Agencies (CRAs) maintain subscriber records and issue PRANs. Points of Presence (PoPs) handle registration, KYC and contributions. Registered Pension Funds manage investments as per PFRDA guidelines. A Trustee Bank facilitates fund flows, a Custodian safekeeps securities, and Annuity Service Providers deliver pensions on exit (PFRDA; NPS Trust).
Implementation occurs through dual channels: the digital eNPS platform of NPS Trust (online registration and contribution) and physical/online modes via PoPs. The Subscriber Registration Form (CSRF for general/All Citizen and NRSF for NRIs) is the official application form required to open an NPS account. Applicants must fill in personal details, KYC information, nomination, choice of Pension Fund, and investment preference (Active or Auto). NRI/OCI onboarding requires specific KYC documents (passport/OCI card, PAN, address and NRE/NRO bank proofs), with recent clarifications facilitating digital onboarding from overseas while strengthening (AML/CFT), Anti-Money Laundering / Combating the Financing of Terrorism compliance.
After submission along with supporting documents and initial contribution, the form is processed for KYC verification and PRAN generation. Subsequent contributions can be made online, via PoPs or Direct Remittance (D-Remit) linked to NRE/NRO accounts (PFRDA). Direct Remittance is a convenient online facility under the National Pension System (NPS) that allows subscribers to transfer contributions directly from their bank account to the NPS Trustee Bank using a unique Virtual Account Number linked to their PRAN.
Funding is entirely subscriber-driven under the voluntary All Citizen Model; there is no mandatory employer contribution. Returns are market linked and net of the low regulated charges levied by intermediaries. On maturity at the age of 60, subscribers can withdraw up to 60% of the accumulated corpus as a tax-free lump sum. The remaining 40% must be used to purchase an annuity that provides a regular lifetime monthly pension (PFRDA). Recent relaxations allow digital KYC without physical presence in India, the process can still involve delays due to cross-border verification and time-zone differences.
Overall NPS and APY have shown strong progress, with the combined subscriber base crossing 9 crore and assets under management exceeding ₹16 lakh crore by late 2025, supported by digital initiatives and the Multiple Scheme Framework introduced in 2025. Specific NRI/OCI enrolment figures are not routinely disaggregated in public dashboards, indicating that uptake, while enabled, remains a smaller subset of the All Citizen segment (PFRDA, 2025). Secondary evaluations note persistent concerns around limited awareness among the diaspora, occasional KYC and documentation friction for overseas applicants, administrative complexities in tax/DTAA claims and repatriation at exit, and the restriction on Tier-II accounts, which reduces liquidity flexibility compared with resident subscribers.
Performance
Over the last 5 years, the expansion of the National Pension System (NPS) to Non-Resident Indians (NRIs) and subsequently Overseas Citizens of India (OCIs) has operated within the broader All Citizen Model. Specific disaggregated NRI/OCI enrolment figures are not routinely published in public Programme MIS or dashboards; performance is therefore assessed through the All Citizen segment (which includes them), overall NPS growth, and official macroeconomic and institutional reporting.
PFRDA’s Programme MIS and pension bulletins show steady expansion of the All Citizen segment. Subscriber numbers under All Citizen rose from approximately 32–36 lakh around end-2023/early-2024 to over 42–50 lakh by early–mid 2026, with year-on-year growth rates frequently in the 17–23 per cent range. Combined NPS and Atal Pension Yojana (APY) subscribers crossed 8–9 crore, while assets under management (AUM) expanded from around ₹11–13 lakh crore in 2023–24 periods to over ₹16 lakh crore by late 2025, reflecting strong contribution inflows and market-linked returns (PFRDA).
The Economic Survey (as reflected in PIB releases) records that NPS subscribers reached 211.7 lakh by 31 December 2025 with managed assets of approximately ₹16.1 lakh crore. Over the decade FY15–FY25, NPS subscribers grew at a compound annual growth rate (CAGR) of 9.5 per cent and AUM at 37.3 per cent, underscoring sustained institutional scaling of which the NRI-enabled All Citizen channel forms a part (PIB, 2026; Economic Survey).
Ministry and PFRDA updates, including press releases, highlight continued digital facilitation (eNPS, D-Remit for NRE/NRO accounts) and recent KYC relaxations for overseas digital onboarding (2025), supporting operational continuity for diaspora subscribers. Sectoral analysis within PFRDA statistics shows the non-government (Corporate + All Citizen) segment contributing an increasing share of new growth relative to the more mature government sectors, although government subscribers still dominate absolute AUM. Trend analysis indicates consistent double digit contribution and AUM growth in voluntary segments, aided by low charges and flexible investment choices.
Figure 1
Source: NPS Trust – AUM and Subscriber Base.
Here, Figure 1, shows the year-wise growth in Assets Under Management (AUM) across NPS sectors, including the All Citizen Model, reflecting strong expansion in pension assets over time.
Figure 2
Source: NPS Trust – AUM and Subscriber Base.
Here, Figure 2, displays the corresponding growth in the number of subscribers under various NPS categories, highlighting the steady rise in the All Citizen segment that includes NRIs and OCIs.
Comparative analysis against the overall pension architecture reveals that while the NRI/OCI window has been fully operational since 2015 (and extended in 2019), uptake remains a modest subset of the All Citizen base. No major adverse findings specific to the NRI expansion appear in available Parliamentary Committee summaries or CAG references in the public domain for this period; the policy’s performance is framed positively within the broader success of NPS as a scalable, regulated defined contribution system. State wise data in PFRDA handbooks focus primarily on domestic All Citizen enrolments, with limited diaspora granularity. Overall, official evidence points to robust system-level performance and enabling infrastructure, even as targeted NRI outreach and reporting granularity remain areas for further strengthening (PFRDA; PIB).
Impact
The expansion of the National Pension System (NPS) to Non-Resident Indians (NRIs) in 2015, and later to Overseas Citizens of India (OCIs) in 2019, has substantially achieved its core intended objectives of providing regulated, portable old-age income security and enabling diaspora participation through formal banking channels with full repatriability of benefits.
Official records confirm that the policy successfully removed the earlier FEMA barrier and created a clear legal pathway. RBI’s 2015 enabling circular and the subsequent PFRDA framework allowed NRIs to contribute from NRE/FCNR/NRO accounts or inward remittances, with no restriction on repatriation of the annuity or accumulated savings. The 2019 Government notification and PFRDA circular extended the same facility to OCIs on a parity basis, explicitly recognising residency-neutral continuity of NPS accounts (RBI, 2015; PIB, 2019; PFRDA).
System level evidence supports positive impact. Economic Survey data cited in PIB releases show NPS subscribers reaching 211.7 lakh by end-December 2025 with assets under management of approximately ₹16.1 lakh crore, reflecting a decade-long CAGR of 9.5 per cent in subscribers and 37.3 per cent in AUM. PFRDA materials repeatedly highlight NPS as “employment neutral and residency neutral,” noting that NRIs and OCIs can continue accounts even during stints abroad, an explicit affirmation that the policy design has delivered portability (PIB, 2026; PFRDA).
Recent operational refinements further demonstrate sustained policy responsiveness. The 2025 amendment to the KYC/AML Master Circular relaxed physical-presence requirements for digital onboarding of NRIs and OCIs while strengthening compliance, facilitating easier access from overseas (PFRDA, 2025).
While public dashboards do not routinely disaggregate NRI/OCI numbers from the broader All Citizen segment, the enabling architecture, legal repatriability, tax benefits where the scheme offers attractive tax benefits of up to ₹2 lakh in total deductions under Indian tax laws through Sections 80C and 80CCD, and continued official emphasis on diaspora inclusion indicate that the primary objectives of access, security and portability have been met.
Emerging Issues
Limited Disaggregated Monitoring Data
Public Programme MIS, PFRDA bulletins and NPS Trust dashboards provide robust aggregate figures for the All Citizen segment but do not routinely publish separate enrolment, contribution or AUM statistics for NRI and OCI subscribers. As a result, the exact number of NRIs registered under NPS since 2015 is not available in official public reports. This gap constrains precise impact assessment, trend analysis and targeted policy calibration for the diaspora cohort (PFRDA).
Restrictions in Product Design
NRI and OCI subscribers remain ineligible for Tier-II accounts. While Tier-I serves the core retirement objective, the absence of a flexible, withdrawable Tier-II option reduces liquidity relative to resident subscribers and may limit attractiveness for those seeking dual retirement-plus-savings functionality.
Citizenship Status and Exit Complexity
A dedicated 2025 PFRDA circular addresses closure of NPS accounts when a subscriber renounces Indian citizenship and does not hold an OCI card, requiring transfer of the entire Accumulated Pension Wealth to an NRO account. The process introduces additional documentation and procedural steps that can create friction at a critical life-stage transition (NPS Trust, 2025; PFRDA, 2025).
KYC and Digital Onboarding Friction
Although the December 2025 amendment to the KYC/AML Master Circular relaxed the requirement of physical presence in India for digital onboarding, it simultaneously reinforced stringent requirements for live photograph, geo coordinates, attested overseas address proofs and enhanced due diligence for high risk cases. These safeguards, while necessary for AML/CFT compliance, continue to impose higher compliance costs and processing time compared with domestic onboarding (PFRDA, 2025).
Inclusion and Outreach Gaps
Despite the legal enabling framework since 2015–2019, official materials continue to emphasise the need for wider awareness and simplified processes. The absence of visible, large-scale diaspora specific campaigns or state wise/diaspora wise performance tracking suggests that inclusion of the overseas Indian community has not yet reached its full potential relative to the size of the diaspora.
Institutional Coordination on Status Changes
Subscribers are required to inform the CRA/PoP within three months of any change from NRI to resident status. Ensuring seamless coordination among PoPs, CRAs, Trustee Bank and NPS Trust for such updates, as well as for repatriation and tax related documentation at exit, remains an area requiring continued operational refinement (PFRDA, 2025).
Way Forward
Strengthening Data Transparency and Monitoring
PFRDA and NPS Trust should introduce periodic disaggregated reporting of NRI and OCI subscribers, contributions and AUM within existing Programme MIS and statistical handbooks. Granular dashboards would enable evidence based targeting, better evaluation of diaspora uptake, and alignment with national priorities of inclusive pension coverage (PFRDA).
Deepening Digital Access and Process Simplification
Building on the 2025 KYC amendments that relaxed physical-presence requirements, further streamlining of digital onboarding, D-Remit facilities and status-update processes for NRIs/OCIs can reduce friction. Continued investment in user-friendly eNPS interfaces and multi-lingual support would enhance accessibility for the global Indian community while maintaining robust AML/CFT standards (PFRDA, 2025).
Expanding Targeted Outreach and Awareness
PFRDA’s recent emphasis on strategic marketing and outreach, including engagement of specialised advisers for pension awareness, should prioritise the diaspora. Collaboration with Indian missions abroad, diaspora associations and financial intermediaries can raise visibility of NPS benefits, tax advantages and repatriability features, converting legal eligibility into higher voluntary participation (PFRDA, 2026).
Enhancing Product Flexibility within Prudential Limits
While Tier-I remains the core retirement vehicle, examination of calibrated flexibility such as limited liquidity features or integration with the Multiple Scheme Framework (MSF) introduced for non-government subscribers could improve attractiveness for overseas Indians without compromising long-term retirement objectives (PFRDA).
Aligning with Broader Development Priorities
The NRI/OCI channel should be explicitly positioned within India’s goals of expanding formal pension coverage, mobilising long-term domestic capital and strengthening diaspora economic engagement. Coordination with the Ministry of External Affairs, Department of Financial Services and investment modernisation initiatives (such as the Strategic Asset Allocation and Risk Governance committee) can ensure that the policy contributes to sustainable retirement security and financial-system deepening (PFRDA; PIB).
Dedicated Diaspora Campaigns
Targeted awareness campaigns should be launched in major diaspora hubs to educate NRIs and OCIs about NPS benefits, tax advantages, and digital enrolment processes. Partnerships with Indian embassies, consulates, and community organisations can help disseminate simplified information and address common doubts. Digital outreach through social media, webinars, and multilingual content would further improve reach among younger and tech-savvy overseas Indians.
Collectively, these steps would convert the enabling legal framework established since 2015 into deeper, measurable inclusion of the overseas Indian community in India’s pension architecture.
References
Pension Fund Regulatory and Development Authority. (n.d.). NPS – All Citizen Model. https://pfrda.org.in/schemes/national-pension-system/nps-for-all-citizen-models
Pension Fund Regulatory and Development Authority. (n.d.). Pension Bulletin. https://www.pfrda.org.in/web/pfrda/research-publications/pension-bulletin
Pension Fund Regulatory and Development Authority. (2025). Handbook of National Pension System Statistics. https://www.pfrda.org.in/documents/33652/203559/HoNPSS+2024-25.pdf
National Pension System Trust. (n.d.). AUM and subscriber base. https://npstrust.org.in/aum-and-subcriber-base
Reserve Bank of India. (2015, October 6). Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Ninth Amendment) Regulations, 2015 (Notification No. FEMA.353/2015-RB). https://rbi.org.in
Reserve Bank of India. (2015, October 29). Subscription to National Pension System by Non-Resident Indians (NRIs) (A.P. (DIR Series) Circular No. 24). https://rbi.org.in
Press Information Bureau. (2019, October 30). PFRDA permitted the Overseas Citizen of India to enroll in NPS at par with Non-Resident Indians. Ministry of Finance, Government of India. https://pib.gov.in
Income Tax Department. (n.d.). Section 80CCD. https://www.incometaxindia.gov.in
Pension Fund Regulatory and Development Authority. (2015). PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015 (as amended). https://pfrda.org.in
About the contributor
Arjya Shree Pande is a Research and Editorial Intern at IMPRI. She is currently pursuing a Masters in Sociology and Advanced Post Graduate Diplomas in Communication for Social Behaviour Change, technical support (UNICEF) and Global Politics. She is seeking analytical, policy, or programme oriented roles in international, governmental, or development settings where she wants her experience in research, behavioural insights, and governance expertise can be applied to evidence based decision making, public service delivery, and technology enabled social impact.
Acknowledgments
The author sincerely expresses gratitude to the reviewers ( Pragya Raghav, Shivali Yadav ), IMPRI India and the editorial team for their valuable comments, constructive suggestions, and continuous guidance throughout the preparation of this article.
Disclaimer
All views expressed in the article belong solely to the author and not necessarily to the organisation.
Read more at IMPRI:
Integrated Fertilizer Management System (IFMS) Through The Lens Of Strategic Planning
E-Samudra Initiative (2026): Digitalising Maritime Governance and Port Operations
