We report direct measurements of ultrafast electronic relaxation dynamics in BiI3 colloidal nanoparticles using femtosecond transient absorption spectroscopy and compare with PbI2, a similar layered iodide semiconductor. The BiI3 nanoparticles are prepared using colloidal chemistry methods in different solvents, including ethanol, I-butanol, acetonitrile, water, and in aqueous poly(vinyl alcohol) (PVA) matrix as well as in inverse micelles. The particle sizes and shapes are determined using low- and high-resolution transmission electron microscopy. The peak positions of the electronic absorption spectra of both PbI2 and BiI3 can be explained using a particle-in-a-rectangular-box model. The absorption peaks are found to blue shift, and at the same time, the particle size decreases upon aging under light for PbI2. These changes are proposed to be caused by breakdown of initially formed large single-layered particles into small multilayered particles. The differences and similarities in their electronic absorption spectra are also addressed. The electronic relaxation dynamics in BiI3 nanoparticles are directly monitored, and the relaxation is found to be sensitive to solvent and insensitive to particle size, similar to that of PbI2. The dynamics are somewhat dependent on the probe wavelength but independent of excitation intensity. Also similar to PbI2, there appear to be oscillatory features at early times with a period changing with solvent but not with particle size. These features seem to be characteristic of these layered iodide semiconductor nanoparticles. For BiI3, however, the oscillation period is slightly shorter and overall relaxation is faster than that in PbI2 in the same solvent. The electronic relaxation is much faster in aqueous solution containing PVA and in inverse micelles with no oscillations observed at early times. The results suggest that the surface play a major role in the electronic relaxation process of both BiI3 and PbI2. The influence of particle size is relatively minor in the size range studied (2- 100 nm), probably because the relaxation is dominated by surface characteristics that do not vary significantly with size. It could also be that the size is much larger than the exciton Bohr radius (0.61 nm for bulk BiI3), and thereby spatial confinement is not significant in affecting the relaxation process.