Government Subsidy Eligibility Checker
Check your eligibility for key Indian government business programs. This tool uses information from the article to show which subsidies are available based on your OCI status.
If you're running a business in India or planning to expand one, you might have heard about the OCI card. It sounds like a golden ticket-lifetime visa, no need to renew, freedom to travel in and out. But for business owners, that shiny card comes with hidden costs and real limitations you won’t find in brochures. The OCI card isn’t a substitute for Indian citizenship, and if you’re counting on it to make business easier, you could be setting yourself up for frustration.
You Can’t Own Land or Start a Farm Business
One of the biggest surprises for foreign nationals holding an OCI card is that they can’t buy agricultural land, plantations, or farmhouses in India. This rule hasn’t changed since 2015, and it still applies today. If your business model involves land acquisition-for example, setting up a food processing unit near a farm or opening a rural agri-tourism resort-you’re blocked. Even if you have Indian roots, OCI status doesn’t override land ownership laws. The Reserve Bank of India and state revenue departments enforce this strictly. You can lease land, but long-term leases (over 5 years) require special approvals, and banks won’t finance projects on leased land the same way they do for owned property.
No Access to Government Tenders or Subsidies
Many government schemes for small businesses-like the PM Mudra Yojana, MSME subsidies, or state-level industrial incentives-are only open to Indian citizens. An OCI cardholder can’t apply for these. Even if your company is registered in India, your OCI status makes you ineligible. For example, if you’re trying to get a 10% interest subsidy on a business loan through a state enterprise development fund, you’ll be turned away because the application form asks for proof of Indian citizenship. No OCI card accepted. This puts OCI holders at a serious disadvantage compared to Indian nationals who can access low-cost capital, tax holidays, and infrastructure support.
Banks Treat You Like a Foreigner
Yes, you can open a business bank account with an OCI card. But don’t expect the same treatment as an Indian citizen. Many banks still flag OCI accounts as ‘non-resident’ even if you’ve lived in India for 15 years. That means:
- Higher documentation requirements-more proof of income, source of funds, and business purpose
- Slower loan approvals-sometimes 30-45 days longer than for Indian citizens
- Lower credit limits-banks cap business loans for OCI holders at 60-70% of what they’d offer to citizens with identical financials
- Restrictions on overdraft facilities and trade credit lines
One entrepreneur in Pune, who runs a textile export firm, applied for a ₹50 lakh working capital loan. His Indian counterpart with the same revenue and collateral got approved in 10 days. His OCI application took 42 days-and came with a 15% higher interest rate. The bank cited ‘higher risk profile’ in their internal notes.
You Can’t Hold Certain Business Licenses
Some industries in India require the owner or key director to be an Indian citizen. These include:
- Defense-related manufacturing (even subcontracting)
- News and broadcasting media
- Private security agencies
- Lottery and gambling operations
- Real estate development firms with foreign investment over 49%
If you’re trying to set up a security firm in Hyderabad or a local news portal in Jaipur, your OCI card won’t get you past the licensing authority. You’d need an Indian citizen as a majority shareholder or director, which adds complexity and potential conflict of interest.
OCI Doesn’t Guarantee Work Visa for Your Employees
Many OCI holders assume they can hire foreign nationals easily because they’re ‘connected to India.’ But that’s not true. If you want to bring in a specialist from the U.S. or Germany to manage your tech team in Bengaluru, you still need to apply for an employment visa under the same strict rules as any other foreign company. The OCI card doesn’t give you any special hiring privileges. In fact, immigration officers often scrutinize OCI-owned businesses more closely, suspecting they’re using the card as a backdoor to bypass work visa rules.
No Right to Vote or Run for Office
It sounds obvious, but it matters more than you think. If you want to influence policy-like pushing for easier GST compliance for small exporters or lobbying for faster customs clearance-you can’t join industry associations that require Indian citizenship. You can’t attend government consultations as a business representative if your status is OCI. You’re an observer, not a stakeholder. Over time, this means your voice gets ignored in policy decisions that directly affect your operations.
OCI Isn’t Recognized in All States the Same Way
While the central government treats OCI uniformly, state governments don’t. In states like Tamil Nadu, Kerala, and West Bengal, local authorities sometimes impose extra checks on OCI holders-especially for property registration, business permits, or environmental clearances. A business owner in Chennai reported being asked to provide a letter from the Ministry of Home Affairs just to renew a trade license, even though he’d held OCI for 12 years. No such requirement exists for Indian citizens. This inconsistency creates delays and extra costs that aren’t documented anywhere.
Renewal Isn’t Free-It’s a Legal Trap
People think OCI is for life, so they forget to renew it. But OCI cards must be reissued every time you get a new passport, until you turn 20, and again after you turn 50. If you miss the window-say, because you were busy expanding your business overseas-you risk having your OCI status flagged as invalid. No warning. No grace period. Your visa could be canceled on your next entry into India. One entrepreneur from Toronto lost three weeks of business meetings in Mumbai because his OCI was suspended due to a delayed passport renewal. He had to fly back to Canada to fix it.
What’s the Alternative?
If your goal is to run a business in India without these restrictions, you have two realistic paths:
- Apply for Indian citizenship-this takes 12 years of residency, but once you get it, all the barriers disappear. You can own land, access subsidies, get loans on equal terms, and vote.
- Partner with an Indian citizen who holds majority ownership. Many foreign investors do this through joint ventures. It’s not ideal, but it works. Just make sure your partnership agreement is airtight and registered with the Registrar of Companies.
There’s no shortcut. The OCI card is great for travel and family visits. But for serious business in India, it’s a half-solution. You get freedom of movement, but not freedom of opportunity.
Can OCI cardholders get business loans in India?
Yes, but with major restrictions. Banks approve loans for OCI holders, but they often require higher documentation, charge higher interest rates, and offer lower loan amounts compared to Indian citizens. Some banks cap loans at 70% of what they’d offer to a citizen with identical financials. Loan approvals also take longer-often 30-45 days more.
Can OCI cardholders buy property in India?
OCI cardholders can buy residential and commercial property, but not agricultural land, farmhouses, or plantation property. This restriction applies regardless of how long you’ve held the OCI card or your Indian ancestry. Leasing land is possible, but long-term leases require special approvals and aren’t eligible for bank financing like owned property.
Can OCI cardholders apply for government business subsidies?
No. Nearly all Indian government business subsidies-such as MSME incentives, PM Mudra loans, export promotion schemes, and state-level tax breaks-are only open to Indian citizens. OCI status does not qualify you for these programs, even if your business is registered in India.
Is OCI better than a business visa?
For short-term visits, a business visa is simpler and cheaper. For long-term presence, OCI offers lifetime entry without renewal. But for business operations, OCI has more legal restrictions than a business visa. A business visa doesn’t restrict land ownership or access to subsidies-it just limits how long you can stay. If you’re planning to live and run a business in India for years, OCI seems better, but the hidden limits make it less practical than it looks.
Do I need an Indian director in my company if I have an OCI card?
It depends on the industry. For most private limited companies, you can be the sole director. But for sectors like defense, media, security, or real estate with foreign investment above 49%, Indian law requires at least one Indian citizen as a director or majority shareholder. Check the FDI policy for your specific sector before registering your business.
Can OCI cardholders start a startup in India?
Yes, you can register a startup under the Startup India initiative. But you won’t qualify for government grants, incubation support, or tax exemptions meant for Indian citizens. You can still raise private funding, apply for patents, and operate legally-but you’ll miss out on public funding programs that could have accelerated growth.
What happens if I don’t renew my OCI card after getting a new passport?
If you fail to update your OCI details after getting a new passport (required before turning 20 and again after 50), your OCI status becomes invalid. You may be denied entry into India, even if you’ve held the card for decades. There’s no grace period. Always renew within 90 days of receiving your new passport.
