NRI's should keep themselves updated with the developments in Indian stock markets. They can make huge amount of money by investing in dull market and selling when the bulls are all around. There are also lots of brokers whoe can help them out in choosing a good investment option. Indian government has opened up various ways for Non resident Indians for investing in india, this helps in two ways as it gives constant inflow of USD's into country thus keeping rupee depretiation in check and it is like another source of investment from outside world. Many tax heaven nations like Mauritius tops the list of foreign investments into India, but acc to me this money is Indian black money coming back through foreign route(it's not proved though).
So here I explain various options available to NRI's for investment in Indian Stock markets: