US based NRIs can also invest in Indian equities

Indian regulations do not prohibit investment in India by NRIs. But in countries like US and Canada, to protect the investors, the market regulator have placed some restrictions. The law does not allow unregistered foreign brokers to offer services to or solicit residents of the US.

But this does not mean that an investor cannot invest in India. There are many other ways to invest in India.

Some people trade in India through the accounts of their parents, family members and friends. This is not entirely legal and it could create problem in future. As their parent will be liable to pay taxes on the capital gains and show cause notice can be served on their friends by the income-tax department to explain the source of their income etc.