How Investment-Based Immigration Works In India: Legal Framework And Opportunities
ABSTRACT
In our increasingly connected world, where the flow of capital is closely linked to policy decisions, investment-based immigration has emerged as a vital strategy for spurring economic growth and encouraging innovation. While many countries have rolled out clear residency or citizenship programs in exchange for foreign investments, India takes a more cautious and somewhat fragmented approach. This research note takes a closer look at India’s legal framework regarding investment-linked migration, examining the current visa categories, legislative challenges, and the potential for aligning immigration policy with India’s economic objectives.
INTRODUCTION
Investment-based immigration, often referred to as “residence by investment” or “golden visa” programs, enables foreign individuals to obtain long-term residency or even citizenship by making a significant economic investment in the host country. These programs are employed globally to attract capital, promote entrepreneurship, and create jobs. Although India is a major player in the global investment arena, it currently lacks a well-defined pathway for investment immigration. However, a variety of visa categories and residency options do provide some indirect avenues for migration. This note delves into the legal, regulatory, and policy dimensions of investment-based immigration in India, pinpointing key opportunities for reform and strategic implementation.
- UNDERSTANDING INVESTMENT-BASED IMMIGRATION: GLOBAL BACKDROP
Investment-based immigration is a policy framework that allows countries to provide residency and occasionally citizenship to foreign nationals who are willing to make significant financial investments in the host country’s economy. The host country benefits from the foreign investment capital, jobs created, technology transferred, and entrepreneurial ventures launched.
Global Examples
United States EB-5: Provides foreign nationals with green cards to stay in the U.S. for investing minimally $800,000 in a U.S. business that creates jobs.
Portugal Golden Visa: Provides residency for individuals making real estate investments or cultural contributions and opening a pathway for citizenship in the EU.
UAE Golden Visa: Provides a 10-year residency to foreign investors and professionals if certain income levels or asset levels are met.
- INDIA’S LEGAL FRAMEWORK FOR INVESTMENT-BASED IMMIGRATION
India has been fairly cautious in respect to a legal framework that supports investment-driven immigration focused on the implications for national security, sectoral interests, as well as to maximize economic benefits in the longer term. Although there is no explicit ‘citizenship by investment’ program, the laws and visa provisions in India allow foreign investors to reside and work in India.
The primary legal instruments governing investment-based immigration to India include:
- Foreigners Act, 1946 – a framework regulating the entry, state, and exit of foreign nationals;
- Citizenship Act, 1955 – provides for citizenship by naturalization yet not by investment;
- FEMA, 1999 – regulates all cross-border investments in India and also compliance with sectorial caps;
- Visa Policy (MHA Guidelines) – covers the business and employment visas for those who wish to either invest or engage in an entrepreneurial activity; and,
- Startup India Initiative (DPIIT) – promotes workforce driven innovative entrepreneurship and is in discussion to facilitate foreign founders.
- CURRENT INVESTMENT-RELATED VISA OPTIONS IN INDIA
We will explore the different types of visas provided in India that give indirect access to foreign investment. Overall, these visas potentially allow investors to obtain residency, and the associated ability to carry out their investment initiatives with certain conditions.
- Business Visa (B-Visa)
A Business Visa can be granted to foreign nationals who are traveling to India to investigate business opportunities or set up a business project.
Key Features:
- Typically granted for up to 5 years with multiple entries.
- Must provide proof of sufficient resources and legitimate expression of business activity.
- Holder cannot work as a salaried employee.
- Can be renewed on condition of established business activity.
This clearly provides an option for investors to enter the country to pursue entrepreneurial ventures. However, it will not directly lead to permanent residency or citizenship.
- Employment Visa (E-Visa)
Foreign investors who are actively managing their businesses in India, are eligible for an Employment Visa.
Eligibility Conditions:
- Must have an Employment or Senior Position with an Indian company.
- Minimum salary threshold: USD 25,000 per annum (exceptions with respect to ethnic cooks, translators and other roles).
- Valid for up to 5 years and can be renewed.
- Dependents are allowed on an Entry Visa.
Startup founders typically use this visa pathway to remain in India while receiving a salary from their startup.
- Long-Term Residency Permit (LTRP)
India’s Long-Term Residency Permit for foreign investors was introduced in 2016. It is a significant step toward investment-based immigration.
Eligibility Criteria:
- The investor must invest a minimum of ₹10 crore within 18 months or ₹25 crore within 36 months;
- The investment must create at least 20 jobs for Indian citizens annually;
- The investment must be in non-speculative sectors like manufacturing or in infrastructure.
Benefits:
- Residency for 10 years (5 years, renewable for 5 years);
- Allows the investor and dependents to stay and travel freely within India;
- There is no need to renounce citizenship;
In spite of the scheme’s geopolitical importance, and even though it has existed for 7 years, it remains underutilized. Primarily due to the complexity of the application process combined with the high investment barrier.
- Startup Visa (Proposed)
Although a Startup Visa has not yet been officially created, the Startup Visa was proposed as part of the Start Up India program to have a program for foreign entrepreneurs to create new DPIIT recognized startups in India.
The Proposal envisioned:
- Residency to founders who will be working full-time on a startup in India.
- Relaxed provisions regarding equity, incorporation, and duration of visa.
- More support with incubators/funding.
If it was implemented, it could greatly enhance India’s ability to attract global entrepreneurial talent.
- CITIZENSHIP BY NATURALIZATION: AN INDIRECT OPTION
India does not provide citizenship for investments, but for long-term residents, citizenship can be applied on the basis of naturalization under Section 6 of the Citizenship Act, 1955.
The two naturalization criteria are:
- Have been a resident of India for a period of 12 months immediately preceding the application.
- Have been a resident of India for at least 11 of the last 14 years.
- Must show intention to reside permanently and assimilate into Indian society.
For investors, this means a long wait and stay compliant with the residency conditions and the legal requirements. There is no special route for economic contributors as is found in some states.
- PROSPECTS FOR FOREIGN INVESTMENT IN INDIA
The investment landscape in India presents various prospects across many sectors, particularly those with governmental assistance and are in high-growth areas:
- Technology and Startups
India is one of the world’s top 3 startup ecosystems.
100% foreign direct investment permitted in most sectors under automatic route.
There is significant interest from investors in fintech, AI, SaaS, and health tech.
- Manufacturing & Infrastructure
‘Make in India’ encourages foreign direct investments in defense, electronics, and automotive areas.
Infrastructure and logistics projects are eligible for foreign direct investment under the LTRP.
- Renewable Energy
Solar, wind, green hydrogen and battery storage (759 GIgawatt by 2030) will attract considerable investment.
This would align with India’s vision of net-zero by 2070 and international climate obligations.
- Real Estate (Limited scope only)
Foreign direct investments in agricultural land is prohibited.
However, investments in commercial real estate and REIT’s is permitted.
These would not be included under the LTRP since they are investment speculations and do not offer immediate risk of capital loss.
- CHALLENGES IN INVESTMENT-BASED IMMIGRATION SYSTEM IN INDIA
India has a tremendous opportunity as a global destination for investment-based immigration, yet faces the following challenges:
- No Clear Investment Visa Pathways: Unlike other countries, India does not have a definitive, systematic plan to allow global investors to participate with residency or citizenship outcomes.
- High Investment Thresholds: The ₹10–25 crore investments required under the LTRP are too high for many small and medium-sized investors.
- Difficult and Uncoordinated Regulations: Investment and visa regulations are set out by different ministries – MHA, MEA, DPIIT, RBI – thus resulting in delays in bureaucratic response and interpretation.
- Limited Path to Citizenship: There is no fast-track or special incentive for foreign investors when acquiring citizenship in partnership with the Indian state and contributing to the national growth agenda.
- Limited Awareness: Limited awareness due to a lack of communication on LTRP and related routes.
- SUGGESTIONS FOR POLICY CHANGE
India could consider the following opportunities to improve its global competitiveness leverage economic immigration:
- Develop a Tiered Investor Visa Program: Similar to the models in place in the EB-5 and Golden Visa programs, India could consider a tiered investor visa program with different entry points depending on the investment and/or sector. The program could also have incentives-aligned obligations to create jobs and bring in technology.
- Initiate the Startup Visa Scheme: Initiate the announced startup visa scheme as a part of the program under Startup India to facilitate streams of high-growth foreign founders.
- Streamline the Administrative Process: India can streamline administrative and regulatory processes using a single-window, online system, to look after all aspects of managing the required tasks for investor visas. This will reduce red tape for investors and create transparency for the government.
- Change Investment Thresholds for Long-term Resident Permits: Reduce barriers to investments in the strategic sectors of renewable energies, health care, and deep-tech.
- Utilize Diplomatically: Consulates and embassies can engage actively with targeted investor communities to convert investment-residency opportunities.
- CONCLUSION
The potential for investment-based immigration to India is vast, driven by the country’s demographic advantage, its growing economy and a burgeoning startup space. The lack of a formal and well-communicated investor immigration policy combined with high thresholds and complexity of process means that foreign investor participation remains small.
However, if India restructured its investment visa options, properly implemented the Startup Visa, and had more accessible legal channels to residency and eventually naturalization, India could join some of the leading destinations for economic immigration in the world. A strategic, pro-investor immigration policy will not just bring money; it will also bring innovation, jobs, and enhance India’s competitiveness globally in the coming decades.
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