This question has a clean statutory answer on eligibility and a much more interesting one on suitability, and the second is where trusts actually come apart.
Eligibility
The Indian Trusts Act, 1882 puts the test at its lowest. Every person capable of holding property may be a trustee, but where the trust involves the exercise of discretion, he cannot execute it unless he is competent to contract. There is no residence condition, no citizenship condition and no domicile condition in that provision. The Act adds that no one is bound to accept a trust, that acceptance is shown by any words or acts of the trustee indicating it with reasonable certainty, and that an intended trustee may instead disclaim within a reasonable period, which prevents the trust property from vesting in him.
So on the face of it, yes. Your name can go in the deed and, if you accept, you are a trustee with all the duties that carries.
The provision nobody quotes, and should
The same Act gives the beneficiary a right, subject to the terms of the instrument of trust, that the trust property shall be properly protected and held and administered by proper persons and by a proper number of such persons. It then explains who is not a proper person for that purpose, and the list begins with a person domiciled abroad. The others are an alien enemy, a person having an interest inconsistent with that of the beneficiary, a person in insolvent circumstances, and, unless the beneficiary's personal law allows otherwise, a married woman and a minor. A second explanation adds that where the administration of the trust involves the receipt and custody of money, the number of trustees should be at least two.
Read those two provisions together and the position is clear. An NRI is not disqualified from being appointed. But a beneficiary who is unhappy has a statutory footing on which to say the trust is not being administered by proper persons, and that is not an argument you want to hand anyone.
The Act allows a new trustee to be appointed in place of a trustee who is for a continuous period of six months absent from India, or who leaves India for the purpose of residing abroad, alongside the more obvious grounds of death, disclaimer, insolvency and unfitness. For an NRI trustee that is not a hypothetical. It is the ordinary condition of your life, and it means a co-trustee or a beneficiary can move to replace you without alleging any wrongdoing at all.
How to structure it so it works
- Never appoint an NRI as sole trustee of an Indian trust. The statutory points above are enough on their own, and the practical ones are worse: banks, registrars and tenants all need someone available in India.
- Appoint at least two, with a resident majority. Where money is received and held, the Act itself expects at least two trustees, and a resident majority answers the proper persons objection before it is made.
- Write the quorum and decision rules into the deed. Say how decisions are made, what a resident trustee may do alone, and what needs everyone. Silence here produces deadlock across three time zones.
- Provide expressly for appointment and removal. Name the person entitled to appoint new trustees, and say what happens on prolonged absence, so the Act's default machinery is not the only route.
- Consider a non trustee role instead. Many families get what they want by making the NRI family member a protector or an adviser whose consent is needed for defined decisions, while the day to day trusteeship sits with residents. That keeps your influence without importing the difficulties.
- Take advice on the regulatory consequences. An NRI trustee can raise foreign exchange and tax residence questions for the trust itself. Those depend on the assets, the beneficiaries and where control is exercised, and they should be looked at by someone with your actual facts rather than assumed away.
The money side
Whatever the trust holds, the value eventually has to reach beneficiaries, and where those beneficiaries are outside India that is a regulated exercise in its own right with its own limits and documentation. Our guide on repatriating money from India as an NRI sets out the channel. A trust structure designed without thinking about the exit tends to work beautifully until the first distribution.
A step back
Before solving the trustee question, it is worth asking whether the trust is the right instrument at all. For many families leaving India the answer is a properly drafted will rather than a settlement, and our guide on the Indian will an NRI should make sets out what that achieves. Where a lifetime transfer really is right, the comparison between the available instruments matters, and our guide on a gift deed, a will and a settlement deed works through the differences in effect, timing and cost.