Can NRIs Buy Agricultural Land in India? Exploring the Possibilities

Published on:
February 22, 2024

Retiring amidst lush farmlands, embracing a farmer's life—this dream resonates with many Non-Resident Indians (NRIs), including Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs). However, the path to realizing this dream is fraught with complexities, primarily centered around the question: Can NRIs buy agricultural land in India? Let's embark on a comprehensive exploration of the intricacies involved in acquiring agricultural land in India as an NRI.

The Dream of Owning Farmland

For NRIs, the dream of owning agricultural land in India often stems from a desire to reconnect with their roots, contribute to their homeland's development, or simply experience the serenity of rural life. Many NRIs, having spent the majority of their lives abroad, see investing in Indian real estate, particularly farmland, as a way to diversify their assets and maintain a connection with their heritage.

Zoning and Classification of Lands

In India, lands are categorized based on scientific methods adopted by local governments to oversee real estate development and use in specific regions. The classifications include residential, commercial, industrial, agricultural, recreational, public use, and infrastructure development. Agricultural land, a crucial component of India's landscape, holds immense potential for those seeking a rural retreat or investment opportunities.

Can NRIs Buy Agricultural Land in India?

The Foreign Exchange Management Act (FEMA) of 1999 governs NRI transactions, remittances, international trade, and the promotion of India's foreign exchange market. One of the significant regulations imposed by FEMA relates to the acquisition of agricultural land by NRIs. In general, NRIs cannot directly buy agricultural land in India. If they attempt to do so, FEMA authorities could issue a notice, and the government might confiscate the land, imposing fines on the individual.

The strict prohibition on whether can NRIs buy agricultural land in India is rooted in the idea of safeguarding India's agricultural resources and preventing speculative practices that could inflate land prices. However, NRIs are not entirely barred from engaging with agricultural land in India; there are specific scenarios where they can participate.

1. Inheritance of Agricultural Land for NRIs

As per FEMA and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, NRIs and OCIs cannot directly buy agricultural land, plantation property, or farmhouses in India. However, they can inherit such properties from Resident Indians. Inheritance opens a channel for NRIs to have a stake in agricultural land, provided they comply with specific regulations, including obtaining special permissions from the Reserve Bank of India (RBI).

2. Special Permissions from RBI

Yes, NRIs can obtain special permission from the RBI to buy agricultural land, but this process is intricate and requires careful consideration. All requests for the acquisition of agricultural land, plantation property, or farmhouses by individuals residing outside India or foreign nationals must be submitted to the Chief General Manager of the RBI. The RBI evaluates these requests on a case-by-case basis, considering factors such as the purpose of the purchase, source of funds, and adherence to local government regulations.

3. Documents Required for Acquisition

The documentation process for acquiring agricultural land in India as an NRI is extensive. Essential documents include a copy of the sale deed or documents of title, evidence of the source of funds, a declaration stating that the land is not intended for prohibited purposes, and evidence that the land is not for commercial purposes or speculation. Additionally, applicants need to provide a copy of the documents of title to the state government where the land is situated.

4. Gift Transactions and Sale of Agricultural Land by NRIs

While NRIs face restrictions in directly purchasing agricultural land, they can engage in gift transactions and sell such land under specific conditions. NRIs can receive agricultural land as a gift from a Resident Indian but are limited in giving such properties as gifts. The sale of agricultural land by NRIs is permitted, but the transactions must comply with regulations. Special approvals are necessary for sales transactions, and the proceeds from the sale must be deposited in the NRO (Non-Resident Ordinary) account of the NRI.

5. Taxation on Agricultural Land for NRIs

Taxation on the sale of agricultural land differs between rural and urban areas. Rural agrarian lands are not considered capital assets, leading to no capital gains tax. However, in urban areas, capital gains tax is applicable on the sale of agricultural land. Understanding the taxation implications is crucial for NRIs involved in agricultural land transactions to ensure compliance with Indian tax laws.

6. Benami Transactions and Other Considerations

Buying property in someone else's name, also known as a Benami transaction, is illegal under the Benami Act. NRIs cannot purchase property in the name of another person unless that person is a spouse, sibling, descendant, or ascendant. Understanding and adhering to Benami laws is essential for NRIs navigating the complex landscape of acquiring agricultural land in India.

Conclusion - Can NRIs Buy Agricultural Land in India

In conclusion, the journey for NRIs seeking to buy agricultural land in India is intricate, governed by a web of regulations, permissions, and restrictions. While direct acquisition is restricted, inheritance, special permissions from the RBI, and adherence to legal frameworks offer avenues for NRIs to engage with agricultural land. Proper documentation, legal counsel, and a nuanced understanding of local laws are indispensable for NRIs navigating this complex landscape. As India continues to evolve and update its land acquisition policies, NRIs must stay informed and seek professional guidance to realize their dream of owning farmland in their homeland.

Get Your Hands on Exciting Investment Opportunities

So, if you live outside India and seek an excellent farmland investment, consider investing with Nimbus Agro Farms. Situated amidst nature, away from urban commotion, and offering a remarkable 12 to 15 percent return on investment, this opportunity is too enticing to overlook.

Reach out to our team and schedule a site visit today to explore further.


1. Can NRIs buy agricultural land in India?

Yes, Non-Resident Indians (NRIs) can purchase land in India, including residential and commercial properties. However, direct acquisition of agricultural land is generally restricted, and NRIs must comply with specific regulations and seek necessary approvals for property transactions.

2. Can US citizens have agricultural land in India?

No, foreign nationals of non-Indian origin residing outside India are generally not permitted to acquire immovable property in India, except in cases where the property is inherited from a person who was a resident in India. Specific legal regulations and permissions apply to such transactions.

Frequently Asked Questions

1. How much does 1 acre of land cost in Bangalore?
1 acre in Bangalore could cost around 55-60 lakhs.
2. Is it good to buy agricultural land in Bangalore?
100%! Agricultural land in Bangalore is a dream come true, given the area, location, and the returns offered at your investment.
3. Which area is best for agriculture in Karnataka?
Naganpally is considered to be a prime location for an investment considering the attractions in its close vicinity amongst others such as Gulbarga, Belagavi, Tumakuru, Raichur, Vijayapura, Bagalkot, etc.
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