BANGALORE: In terms of the Foreign Exchange Management Act (FEMA) 1999, a resident outside India means a person who is not residing in India. NRIs have started investing more into India and now their investments are becoming riskier for India, reports according to the latest reports released by Union finance ministry reports Business Standard.

According to the finance ministry's report these attributes have given rise to the mobilization of fresh foreign currency non-resident (bank) or FCNR (B) deposits by commercial banks under the special swap scheme offered by the Reserve Bank of India during 2013 - a move that helped shore up the rupee and build India's foreign exchange reserves.

A consequence of this successful strategy was the increase in the importance of NRI deposits. For instance, NRI deposits now account for almost a quarter of India's total external debt, standing next only to external commercial borrowings, which have the largest share at about a third of India's total external debt.

India's reliance on NRI deposits has been rising, particularly in crisis years, even as the share of external assistance in total capital flows has come down to a trickle at around one to three per cent in the last three years.