No, since you are an expat, this rule doesn't apply to you while remitting back your profits. Your capital will go back to your NRE account once you exit your investments, (assuming that's where you invested it from) and then you can remit it back from there to your resident bank account using any remittance product

If the money goes back to my NRE account, then I (as a PAN card holder) can myself have an NRE account, tied to a brokerage firm like Zerodha and I can trade and manage my money there myself much more efficiently and at negligible cost?

What is the value proposition you are offering by charging 1% management fee?

Firstly, opening account with Zerodha requires physical paperwork.

"Non-Resident Indian (NRI) Zerodha accounts can only be opened offline, unlike regular accounts." https://support.zerodha.com/category/account-opening/nri-acc...

Secondly, we are not just a way to invest faster but also offer continuous rebalancing services, and are an end to end platform for NRIs along with taxation and repatriation support.