How NRIs can send money to family and businesses in India but one wrong step violates FEMA – NRIs can legally lend money in India but the rules are strict | The Economic Times

https://economictimes.indiatimes.com/wealth/legal/will/how-nris-can-send-money-to-family-and-businesses-in-india-but-one-wrong-step-violates-fema/nris-can-legally-lend-money-in-india-but-the-rules-are-strict/slideshow/131191414.cms

Clipped from: https://economictimes.indiatimes.com/wealth/legal/will/how-nris-can-send-money-to-family-and-businesses-in-india-but-one-wrong-step-violates-fema/nris-can-legally-lend-money-in-india-but-the-rules-are-strict/slideshow/131191414.cms

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You can lend in USD, but only up to $250,000 and interest-free

NRIs and OCIs can give loans in foreign currency to close relatives in India on a repatriable basis. This means the money can be sent back out of India when repaid. But there are tight conditions.

1. Maximum loan amount: USD 250,000 (or equivalent in GBP, EUR, etc.)
2. Funds must come from remittances, NRE, or FCNR accounts – not from NRO accounts
3. Minimum loan tenure: 1 year
4. The loan must be completely interest-free – you cannot charge any interest

This route is only available to close relatives as defined under the Companies Act, not friends, acquaintances, or business partners.