Agricultural land sits in a different legal category from residential or commercial property in India. For NRIs, that difference matters a great deal: while you may inherit farmland, you cannot freely purchase or dispose of it the way you would an apartment. The law—principally under FEMA and related state rules—protects agricultural land from speculative acquisition by non-residents, but it also creates carefully defined corridors for inheritance, gifts and constrained transfers. This article explains those corridors, the practical steps for mutation and change-of-use in Delhi/NCR, and the sale/transfer options available to an NRI. It also flags the exceptions and regularisation routes you should consider if your situation is non-standard. 

1. Prohibitions on Purchase

Short answer: No — an NRI cannot buy agricultural land in India.

Under the FEMA regime and RBI instructions, NRIs and PIOs are generally prohibited from purchasing agricultural land, plantation property or farmhouses in India. This is a long-standing public policy aimed at protecting agricultural resources from speculative, offshore investment. Attempts to acquire such land in contravention of FEMA can attract enforcement action, including directions to divest and penalties.

What “purchase” covers: registered sale deeds, agreements to sell and any direct acquisition from a resident transferor. The prohibition is national in scope, but its practical consequences vary by state because land law (including who can hold what land) is largely a state subject under the Constitution. That means state rules may add further restrictions or procedural steps.

2. Inheritance and Gift — the key exceptions

NRIs can inherit agricultural land. They may also receive agricultural land by way of gift under certain circumstances, but there are important limits:

Inheritance: 

If an NRI inherits agricultural land (by Will or by intestate succession), the inheritance is recognised — you do not lose title simply because you are non-resident. However, post-inheritance restrictions apply: typically, an NRI who inherits agricultural land must sell it to a person resident in India (i.e., an Indian resident), and cannot normally transfer it to another NRI. Banks and revenue authorities expect the owner to comply with these rules.

Gift: 

A PIO may receive gifts of immovable property subject to conditions; an NRI’s ability to receive a gift of agricultural land is generally more restricted and will depend on whether the donor is resident and on state law. In practice, many authorities treat gifts of agricultural land to non-residents with caution and often allow transfers only to residents.

3. FEMA land rules for NRI

The Reserve Bank’s Master Circulars and FAQs under FEMA set the high-level rules: PIOs/NRIs may not purchase agricultural land, but they may inherit it. PIOs may acquire other immovable property (residential/commercial) by purchase, subject to conditions, but agricultural property is an explicit exception. The MEA and RBI documents reiterate that transfers of agricultural land should be to Indian residents.

Two points to underline:

  1. FEMA is about foreign exchange and ownership by non-residents; it does not change state land statutes. You must therefore satisfy both central (FEMA/RBI) and state (revenue/land use) rules.
  2. If you acquired agricultural land while resident in India and later became an NRI, your rights are different — many restrictions apply only to acquisitions made while you were non-resident. Always check acquisition date vs. change-of-status date.

4. Mutation & use-change realities in Delhi/NCR

Mutation (entry of ownership in land/municipal records) and change of land-use present real, administrative challenges in Delhi/NCR.

Mutation and Khata/Jamabandi

For village and agricultural land, mutation and inclusion in khata/khatauni or jamabandi records establish the revenue record of ownership. The Delhi Development Authority (DDA) and local revenue offices maintain handbooks and precise procedures for mutation; an NRI inheritor must follow the same mutation process as a resident heir, producing succession documents, identity proof, and tax receipts. Failure to get mutation can block any future sale or loans.

Change of use / CLU (Conversion to Non-Agricultural Use)

Converting agricultural land to residential or commercial use in Delhi/NCR requires a formal Change of Land Use (CLU) or Non-Agricultural (NA) permission from the appropriate authority (Municipal Corporation, DDA or the state authority). CLU involves fees, compliance with zoning and master plans, and can be refused if the land is designated for agriculture. Attempting to develop without CLU risks penalties, demolition or reversal orders.

If your inherited parcel is in Delhi/NCR and you intend to develop or sell it for non-agricultural use, first secure CLU and ensure mutation reflects your title. Otherwise, your buyer may be unable to obtain a clear title or bank finance.

5. Sale and transfer options for an NRI owner

If you inherit agricultural land, what can you do with it legally?

  1. Sell to an Indian resident: This is the usual and safest option. FEMA and RBI expect sale of agricultural land by an NRI to be made to a resident Indian. The sale proceeds can then be repatriated only as per RBI rules and tax compliance if required.
  2. Gift to a resident: Some transfers by way of gift to a resident may be permitted, but state rules and stamp duty/gift tax implications must be checked.
  3. Retain for agricultural use: You may keep the land and have it farmed by local tenants or managers. But long-term non-resident ownership without local usage can trigger scrutiny; some states require actual cultivation or local residency of owners. Confirm with local revenue authorities
  4. Convert and develop (with permissions): If CLU is available and granted, you may convert use — but conversion processes are time-consuming, expensive and state-specific. Conversion doesn’t change FEMA’s baseline; even after conversion, other legal checks (local approvals, environmental clearances) apply.
  5. Sale to another NRI or transfer abroad: Generally not allowed. FEMA and RBI position is clear: agricultural land should not be transferred to non-residents; such transactions are routinely blocked or reversed.

6. Lead capture & regularisation: when you need expert help

Many NRI cases are not straightforward: split heirs, ambiguous wills, land located in peri-urban areas that straddle “agricultural” and “development” zoning, or old family partitions with incomplete mutation. For these exceptions you should:

  • Obtain a legal opinion from a lawyer experienced in both FEMA and state land laws.
  • Get a Chartered Accountant to advise on tax and capital gains consequences.
  • Consider regularisation—application for mutation, CLU or retrospective permissions where state law permits.

Conclusion

FEMA and RBI keep agricultural land largely off-limits to NRIs for purchase, but inheritance and a few controlled transfers remain possible.