Can an NRI buy farm land or a farmhouse in India?

Can NRI buy farm land in India: the FEMA rule

The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 allow NRIs and OCIs to acquire immovable property other than agricultural land, plantation property and farmhouses. A gift of such land from a relative is not allowed either. Inheritance is the only route.

What about managed farmland and farm plots?

These schemes sell small plots of agricultural land, often with a promise of maintenance, plantation or a weekend house. The label does not change the land's legal character. If the land is agricultural in the records, an NRI cannot buy it, whatever the brochure says.

How these schemes are sold to NRIs

• An agreement in the name of a resident relative.
• A long lease instead of a sale.
• Shares in a company that owns the land.
• A promise that conversion to non-agricultural use is coming.

Each carries legal risk and should be checked before any payment.

Can NRI buy converted agricultural land?

Yes, if the conversion to non-agricultural use is already complete and recorded before the purchase. See buying a plot to build on.

Questions to ask about any farm plot offer

• What do the land records show: agricultural or non-agricultural?
• Is the land in your name, a relative's name or a company's?
• Has conversion actually been granted, with an order you can verify?
• What does the developer own, and what are you actually getting?

If the honest answer to the first question is agricultural, an NRI should not proceed.

What state laws add

Apart from FEMA, several states limit purchases of agricultural land to agriculturists or residents of the state, and some cap holdings. A scheme that seems to work under FEMA may still fail under the state law, and the reverse.

What if you have already paid?

Get advice quickly. Options include cancelling and recovering the money, transferring to a resident relative, or compounding the FEMA breach. See penalty for NRIs buying agricultural land.