To understand what a non-repatriable demat account means, we need to first understand what repatriable means.
Investopedia defines repatriable as something capable of repatriation or being brought to or acquired in a foreign country. Something is repatriable if the laws of both the foreign and home country permit and don’t impede their repatriation.
Thus, non-repatriable funds, or those funds which cannot be taken abroad, must be kept separate from repatriable funds in a separate bank NRO or non-resident ordinary account. As investments made from such funds cannot be repatriated, i.e. proceeds from sale or otherwise from such investments cannot be taken abroad, hence, these investments are maintained in a non-repatriable demat account.
Its noteworthy that once funds are transferred to NRO account from NRE, it loses its repatriability and hence, cannot be transferred back to NRE account.