An NRE account is an account opened in India in the name of an NRI, to use their foreign earnings; whereas, an NRO account is an account opened in India in the name of an NRI, to manage their income earned in India.  

Funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts.