For NRIs based out in the US, it seems like the logical step to invest in India’s growth, however tax complexities make it intimidating. Majority of Indian Mutual Funds are classified as PFICs, or Passive Foreign Investment Companies by the IRs, which triggers the punitive US tax treatment with high rates as well as burdensome reporting via Form 8621. The best solution is to not navigate the PFIC rules by following compliant structures.