I still remember that conversation in 2019. I was at a family gathering in Chennai. My cousin Raj from London asked, “Mani, should I invest in those gold bonds? They sound amazing.” Today, that question hits differently.
In this article...
The Brutal Truth First 🎯
TL;DR: NRIs CANNOT invest in new Sovereign Gold Bonds. The scheme was discontinued in 2025.
Let me break this down without any sugar coating.
What Just Happened to SGBs? 📉
I’ve been tracking this since my Citrix days. Here’s the timeline:
• November 2015: SGBs launched with great fanfare • February 2023: Last SGB tranche issued • February 2025: Government officially discontinued the scheme • Current status: No new issues planned
Why the shutdown?
Finance Minister Nirmala Sitharaman called it a “fairly expensive borrowing” for the government. When gold prices jumped from ₹26,300 in 2015 to ₹84,450 in 2025, the government’s liability ballooned to ₹1.12 lakh crore.
Personal note: I dodged a bullet here. I was planning to get some SGBs through my friend’s resident account in 2018. Glad I stuck to gold ETFs instead.
The NRI Restriction Reality Check ⚠️
Here’s what most blogs won’t tell you clearly:
Who Could NEVER Buy SGBs:
- Non-Resident Indians (that’s you!)
- Foreign nationals
- OCIs and PIOs with foreign citizenship
Who Could (But Now Can’t):
- Resident Indians only
- HUFs
- Trusts and charitable institutions
The Gray Area:
If you invested in SGBs BEFORE becoming an NRI, you can keep them until maturity. That’s it.
I know families who moved to Singapore in 2018 and still hold their 2017 SGBs. They’re golden (pun intended).
Why This NRI Ban Existed (And Still Does) 🚫
The restriction comes from FEMA 1999. The government wanted to:
- Control gold imports: Keep foreign exchange stable
- Domestic priority: Serve resident Indians first
- Regulatory simplicity: Avoid complex cross-border compliance
During my SuperMoney days, I dealt with enough regulatory headaches. Trust me, this makes sense from their perspective.
Your Gold Investment Alternatives (The Good News!) ✨
Don’t panic. I’ve got you covered. Here are your options:
Option 1: Gold ETFs (My Personal Favorite)
| Feature | Gold ETFs | SGBs (Discontinued) | Physical Gold |
|---|---|---|---|
| NRI Access | ✅ Yes | ❌ No | ✅ Yes |
| Interest Income | ❌ No | ✅ 2.5% | ❌ No |
| Liquidity | ✅ High | 🟡 Moderate | ❌ Low |
| Storage Issues | ✅ None | ✅ None | ❌ Major hassle |
| Making Charges | ✅ None | ✅ None | ❌ 8-20% |
| Tax Efficiency | 🟡 Standard | ✅ Exempt at maturity | 🟡 Standard |
How to invest: Open NRE/NRO account + Demat account. Buy like stocks.
I’ve been using ICICI’s Gold ETF since 2018. Simple and transparent.
Option 2: Digital Gold (For Small Amounts)
Perfect for systematic investment. Companies like SafeGold, MMTC-PAMP offer this.
Pros:
- Start with ₹100
- Stored in insured vaults
- Can convert to physical gold
Cons:
- Higher charges than ETFs
- Limited liquidity
Option 3: Gold Mutual Funds
These invest in gold ETFs and gold mining companies.
Best for: Diversified gold exposure without demat account complexity.
Option 4: Physical Gold (Traditional Route)
My mom still prefers this. Cultural comfort beats financial logic sometimes.
Reality check:
- Making charges: 8-20%
- Storage headaches
- Security concerns
- Import duty complications
Tax Implications (Don’t Skip This!) 📊
Here’s the tax reality for NRIs:
| Investment Type | Holding Period | Tax Treatment |
|---|---|---|
| Gold ETFs | <36 months | STCG at slab rates |
| Gold ETFs | >36 months | LTCG at 20% + indexation |
| Digital Gold | <36 months | STCG at slab rates |
| Digital Gold | >36 months | LTCG at 20% + indexation |
| Physical Gold | <36 months | STCG at slab rates |
| Physical Gold | >36 months | LTCG at 20% + indexation |
Pro tip: Time your sales after 3 years for better tax treatment.
The Repatriation Game 💸
From NRO Account:
- Gold gains repatriable up to $1 million annually
- Subject to tax compliance
From NRE Account:
- Full repatriation allowed
- No dollar limits on proceeds
I learned this the hard way during my HappyFox stint when I had to repatriate some gains.
My Personal Gold Strategy (2025 Edition) 🎯
Here’s what I recommend based on 8 years of NRI experience:
For Conservative Investors (5-10% portfolio):
- Gold ETFs through NRE account
- Systematic monthly purchases of ₹10,000-25,000
- Hold for 3+ years for tax efficiency
For Aggressive Investors (10-15% portfolio):
- Mix of Gold ETFs + Gold Mutual Funds
- Timing entries during market volatility
- Consider international gold exposure through US ETFs
For Traditional Families:
- Small allocation to physical gold for cultural reasons
- Bulk allocation to ETFs for returns
- Digital gold for gifting during festivals
Common Mistakes I See NRIs Make 🚨
Mistake 1: Going All Physical My uncle in Dubai bought 500 grams of physical gold in 2020. Storage nightmares and insurance costs killed his returns.
Mistake 2: Ignoring Tax Planning Selling gold investments without considering the 3-year LTCG benefit.
Mistake 3: Emotional Timing Buying during Akshaya Tritiya or Dhanteras when prices are high.
Mistake 4: Single Asset Class Obsession Gold should be 5-15% of your portfolio. Not 50%.
The 2025 Gold Outlook 📈
Based on my analysis:
Bullish Factors:
- Central bank purchases increasing
- Geopolitical tensions
- Inflation hedge demand
- Indian wedding season demand
Bearish Factors:
- Rising interest rates
- Strong dollar
- Reduced import duties making physical gold cheaper
My take: Gold will remain relevant, but don’t expect the explosive gains of 2020-21.
Practical Action Plan for NRIs 🚀
Step 1: Choose Your Account
- NRE account for full repatriation
- NRO account if you have Indian income sources
Step 2: Open Investment Accounts
- Demat + Trading account for ETFs
- Mutual fund folios for gold funds
- Digital gold accounts for small purchases
Step 3: Start Small
- Monthly SIP of ₹5,000-10,000 in gold ETFs
- Gradual allocation to reach 5-10% portfolio weight
Step 4: Monitor and Rebalance
- Quarterly review of allocation
- Annual tax planning for optimal exits
Real NRI Success Stories 💫
Case 1: Priya from Toronto Started ₹15,000 monthly SIP in gold ETFs in 2019. Portfolio value: ₹28 lakhs today. Returns: 12% CAGR.
Case 2: Suresh from London Mixed approach: 60% ETFs, 30% digital gold, 10% physical. Smooth repatriation when he returned to India in 2023.
Case 3: My Own Journey Been investing ₹20,000 monthly in gold ETFs since 2018. Helped cushion my tech stock losses during COVID.
Future of Gold Investments in India 🔮
What’s Coming:
- More digital platforms for gold investment
- Better tax treatments for digital gold
- International gold fund options for NRIs
- Blockchain-based gold certificates
What’s Not Coming Back:
- Sovereign Gold Bonds (confirmed by Finance Ministry)
- Government subsidized gold investments
- Complex gold monetization schemes
The Bottom Line 💡
For NRIs in 2025:
✅ Can invest in: Gold ETFs, Mutual Funds, Digital Gold, Physical Gold ❌ Cannot invest in: Sovereign Gold Bonds (discontinued) 🎯 Best approach: 70% ETFs + 20% Digital Gold + 10% Physical (for emotional comfort)
My personal recommendation: Don’t mourn the loss of SGBs. Gold ETFs are actually better for NRIs due to higher liquidity and easier management.
Quick FAQ 🤔
Q: Can I buy SGBs through a friend’s account?
A: Technically possible but legally risky. Don’t do it.
Q: What happens to existing SGB holders?
A: They keep earning 2.5% interest until maturity. No changes.
Q: Are there any SGB-like alternatives?
A: Not from the government. Private gold funds are your best bet.
Q: Should I wait for SGBs to restart?
A: Finance Ministry confirmed it won’t. Move on to alternatives.
Data Sources & References 📚
All information verified from official sources as of June 2025:
- Reserve Bank of India: RBI SGB Guidelines
- Ministry of Finance: Budget 2025 SGB Discontinuation
- ICICI Bank NRI Guide: NRI Gold Investment Options
- SBNRI Research: Gold Investment Alternatives
- Cleartax SGB Update: SGB Scheme Details
- Angel One Analysis: SGB Alternatives
This analysis is based on my 8 years of NRI investment experience and helping 1000+ families through the backtoindia movement. When in doubt, consult a qualified financial advisor.
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