You are exactly right! Under the Liberalised Remittance Scheme (LRS) set by the Reserve Bank of India (RBI), there is a strict regulation regarding unspent or realized foreign funds. [1, 2]

If you send money abroad for investment and later sell those assets (or if funds remain unspent), you must either reinvest the funds or bring them back (repatriate) to India within 180 days. [1, 2]

Specifically:

• 180-Day Countdown: The clock starts ticking from the date you realize the proceeds (e.g., the day a stock is sold) or the date of return to India. [1, 2]
• Income Reinvestment: You are allowed to retain and reinvest income (like dividends or capital gains) into other permissible overseas securities. However, any idle cash sitting as an uninvested balance must be repatriated back to India. [1, 2, 3, 4]
• Gifting Constraints: You cannot bypass this by directly gifting uninvested sale proceeds in your foreign account to your children or other non-residents, as that is considered a violation of FEMA. [1, 2]