This is a different exposure from the one covered in our article on gifting money between India and the US, which deals with lifetime gift reporting (Form 3520 and similar) between living people. US estate tax is triggered at death, applies to the value of specific property the decedent owned, and — for a nonresident alien (an NRA, meaning someone who is neither a US citizen nor domiciled in the US for estate tax purposes) — comes with a far smaller shelter than most people assume, because the large exemption figures widely quoted in the US press apply to US citizens and domiciliaries, not to NRAs.
The exemption gap is large, and NRA-specific
The current US estate tax exemption for US citizens and domiciled residents runs into the millions of dollars per person under recent tax legislation and IRS inflation adjustments — confirm the exact current-year figure before citing it, since it changes with each inflation adjustment and legislative update. For a nonresident alien, the exemption is structurally different: NRAs get a unified credit that shelters only the first $60,000 of US-situs property, and — unlike the citizen/resident exemption — this $60,000 figure is not indexed for inflation and has stayed fixed for decades. Anything above that $60,000 in US-situs assets is exposed to US estate tax at graduated rates that top out at 40%. This is one of the more consequential and least understood traps for NRIs who hold US brokerage accounts, US real estate, or US company stock without US citizenship or a US domicile.
What counts as US-situs property
US-situs property for this purpose generally includes US real estate, tangible personal property physically located in the US, and — notably — stock issued by US corporations, which counts as US-situs regardless of where the shares or brokerage account are actually held or where the decedent lived. Debt obligations of US persons or entities are generally treated as US-situs too, with certain exceptions (such as some portfolio-interest-qualifying debt). By contrast, foreign real estate, shares of non-US companies, and — under commonly cited guidance — US bank deposit accounts and proceeds of a life insurance policy on the decedent's own life are generally treated as non-US-situs and outside this exposure; the deposit and life-insurance treatment in particular is fact-specific enough that it's worth confirming against current IRS guidance or with a cross-border estate attorney rather than relying on a general description.
No estate tax treaty relief between the US and India
Unlike lifetime income tax, where a US-India tax treaty (DTAA) exists and materially shapes outcomes, the US has estate and gift tax treaties with only a short list of countries (commonly cited examples include the UK, Germany, France, Japan, and Canada) — and India is not on that list. That matters because in some treaty relationships, an NRA's estate can claim a much larger pro-rated share of the citizen-level exemption based on the ratio of US-situs to worldwide assets; without a treaty, an NRI's estate is generally limited to the flat $60,000 shelter with no such pro-ration available. An estate that crosses the threshold is required to file Form 706-NA, and the filing threshold itself is also the fixed, non-inflation-adjusted $60,000 figure — confirm current instructions before relying on any of these figures for actual estate planning, since this is exactly the kind of number that gets casually mis-cited as 'the same as the citizen exemption' when it plainly is not.