Can an NRI (children are foreign citizen) transfer or gift his property in

India to his children?

An NRI (Non-Resident Indians), according to Regulation 2 of FEMA Notification No.13,
means a person resident outside India who is a citizen of India. Whereas PIO (Person of Indian
Origin) means a citizen of any country other than Bangladesh or Pakistan who had

(a) at any time held Indian passport or

(b) he or either of his parents or any of his grandparents was a citizen of India by virtue
of the Constitution of India or the Citizenship Act, 1955 or

(c) the person is a spouse of an Indian citizen, or a person referred to in (a) or (b).

So, children of NRIs who are foreign nationals will fall under the category of PIO by virtue of
the given condition that either of their parents was a citizen of India according to the
Constitution of India or the Citizenship Act, 1955.

Acquisition and transfer of immovable property in India by NRIs / PIOs / Foreign Nationals of
Non-Indian Origin is regulated in terms of Sub-sections (3), (4) and (5) of Section 6 of the
Foreign Exchange Management Act, 1999 read with Notification No. FEMA 21/2000-RB
dated May 3, 20001.

It states the rights of PIO with regards to Gift/Inheritance of Immovable property.

(a) A PIO may acquire any immovable property other than any agricultural land,
plantation property or farmhouse in India from any person resident in India or an
NRI or a PIO.
(b) A PIO may acquire any immovable property in India by way of inheritance from a
person resident in India or a person resident outside India who had acquired such
property in accordance with the provisions of the foreign exchange law in force or
FEMA regulations, at the time of acquisition of the property.

Therefore, an NRI whose children are foreign citizens can gift or transfer his property in India
to his children.

1
Master Circular on Acquisition and Transfer of Immovable Property in India by NRIs/PIOs/Foreign Nationals
of Non-Indian Origin, RBI,
https://www.rbi.org.in/commonperson/english/Scripts/Notification.aspx?Id=1175#2B