Best Investment In India For Nri – Depreciation of the rupee has accelerated the investment interest of NRIs in India. A CII-Anarock study reveals the trends.
Hyderabad, NCR, and Bengaluru are among the top three destinations for NRIs when they choose a home in India, a CII-Anarock survey on the top NRI Real Estate Wish List shows. In the survey for the corresponding period last year, Bengaluru, Pune and Chennai were the top choices for most NRIs.
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The reason, the report suggests, is the devaluation of the rupee along with the Indian real estate market. Interestingly, MMR (Mumbai Metropolitan Area) is a distant fourth in the NRI wish list.
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According to the report, at least 60 percent of NRI respondents are willing to buy a home in one of these three cities with 22 percent preferring Hyderabad, 20 percent eyeing NCR and 18 percent Bengaluru.
According to the survey, out of 5,500 survey participants, 7 percent are NRIs who are currently based in the United States of America, Canada, the Gulf, Europe, and various Asian countries. Pre-Covid (2019) options were Bangalore, Hyderabad and NCR. In the Covid era, the favorites were Bangalore, Pune and Chennai.
“In particular, more NRIs prefer investing in Indian real estate over stocks, mutual funds, gold, and fixed deposits. In our H1 2022 survey, 71 percent of NRI respondents saw Indian real estate as the best investment option. This is in a whopping 55 percent higher than the pre-Covid edition. Despite the worst of Covid-19 now in the past, NRIs have clearly not forgotten the uncertainties that come with living in a foreign country during a major pandemic. , “Prashant Thakur, Sr. Director & Head – Research, Anarock Group, said.
“Securing housing in India has been, and remains, a priority for Indians everywhere. While domestic home ownership sentiment remains strong even as home loan interest rates and house prices tighten, the rupee’s depreciating value against the US dollar is a significant advantage. to NRIs.”
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Housing has seen a 15-20 percent increase in NRI demand in the first nine months of 2022 compared to the corresponding period in 2021.
“According to Anarock Research, about 2.73 lakh houses were sold in the top 7 cities during January-September 2022, “On an average, NRIs account for 10-15 percent of the houses sold in any given quarter,” he adds.
The demand for larger homes is one of the defining new developments in the post-Covid era. While schools and offices have reopened, demand for additional living space remains low. Many large IT companies and IT start-ups are now working on a hybrid operating model. For NRIs, favorable exchange rate is another major motivation to secure bigger houses. The current H1 2022 survey finds that 77 per cent of NRI respondents will buy bigger houses – 54 per cent prefer 3BHKs and 23 per cent are looking to buy 4BHKs. Only 22 percent of NRI respondents are now looking for 2BHKs. In the pre-Covid survey, at least 40 percent were eyeing a 2BHK.
63 percent of NRI respondents currently own premium properties priced between Rs 90 lakh – 1.5 cr. In last year’s survey, 59 percent of NRIs preferred luxury properties priced between Rs 1.5 Cr and Rs 2.5 Cr.
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Many NRIs are now looking to return to India and actively use these properties. The current economic situation in many countries is uncertain due to the backward dynamics brought about by the Ukraine-Russia war, while India’s economy is doing remarkably well. List of Best Investment Options for NRIs in India: Since the last two decades, India has been rapidly developing as an industrial hub. Day by day, our country is attracting more and more foreign direct investment (FDI). Moreover, these days we can see more and more investments coming from NRIs to Indian markets. And all this is happening because the Indian economy and government are offering enough stability and flexibility to investors. Not only is India ripe for business growth, but our economy is also equipped with a highly efficient financial market.
The year 2020 has seen a huge upheaval in its journey. While the broad market indices (Nifty and Sensex) fell by over 35% during the outbreak of the pandemic, the market has since recovered significantly. However, financial markets are subject to many ups and downs. It goes without saying that you need to do end-to-end research before making your investment decision. However, whichever investment option you choose, it should always depend on your financial goals, liquidity needs, risk appetite, and expected returns.
In this post, we will discuss some of the best investment options for NRIs in India that can provide adequate returns as per their goals and needs. Let’s get started.
Here are some solid investment options in India that you can consider investing in if you are an NRI.
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Investing in Fixed Deposit is not only popular among residents in India, but is also an attractive investment scheme for NRIs. As an NRI, you can open your FD through your NRE, NRO, or FCNR Account. All three of these are the types of bank accounts that an NRI can open in India.
However, how much interest rate will be charged on your FD depends on the duration of your deposit. In general, you can expect to earn between 6 and 7% interest on your account balance. Additionally, if you are a senior citizen, you will get the privilege of earning an additional one percent interest. Moreover, this investment option is suitable for risk-averse investors as FD is a more versatile form of investment.
If you are an aggressive investor, you can consider investing in stocks listed in the Indian stock market. If you are an NRI, you can directly invest in the Indian market under the Portfolio Investment Scheme (PINS) of the RBI.
As an NRI, to invest in the stock market in India, you are required to have a bank account (NRE or NRO Account), a trading Account (registered with a SEBI Stock Broker) and a demat account. However, the maximum amount of your investment in the stocks of an Indian company cannot exceed 10% of its paid-up capital.
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However, it should be noted that, as an NRI, you are never allowed to do insider trading and short selling in India. This means you need to own stocks before you can sell them.
These days AMFI is working hard to promote Mutual Funds among the Indian population. Mutual Fund organizations collect money from their investors and then invest the same in various financial assets. Mutual Funds have moderate risks as they are not as risky as direct trading of companies, nor as risky as FDs. In addition, mutual fund investments can be very profitable. There are many plans for Mutual Funds that you can choose according to your risk and financial requirements.
However, if you are a person residing outside India, unfortunately you will face some restrictions in mutual fund investment in India due to some stringent FATCA regulations. You are required to have an NRE or NRO Account to invest in the Indian Mutual Fund industry. Moreover, you should invest in Indian rupees and not in foreign currencies.
The safest form of investment like FD is mutual fund. PPF is an investment alternative sponsored by the Government of India. Even if you are an NRI, you can invest in PPF. However, the maximum limit here is Rs 1.5 lakh in a financial year.
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You can open your PPF account through a post office or through a branch of any nationalized bank in India. Although PPF comes with a lock-in period of 15 years, it is definitely more taxable than FD. To know more about PPF, you can read this blog on our website.
If you are looking for another tax-efficient investment option, you can also consider investing in NPS (National Pension Scheme). This is also a cost-effective, easily accessible and tax-efficient way to invest your money.
The National Pension Scheme is a pension system sponsored by the Government of India. If you invest in this instrument, your entire capital is treated as tax-free at the time of maturity. Apart from that, you don’t have to pay a single penny as tax to the government on the amount you withdraw as pension. If you are an NRI between 18 and 60 years of age, you can open an NPS Account to start investing in this scheme. Click here to know more about NPS.
It is a fact that there are many NRIs staying abroad looking to buy their home in India. The population of India is constantly growing and this itself leads to the development of the Real Estate business in the nation. Being an NRI, you can invest in a property in India than you can get by handing it over to a third party.
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However, it should be noted that, you have to make such purchases only in Indian rupees.
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