Why and Where Should NRIs Invest in India?

India’s economy ranks well (within top 10) when it comes to purchasing power parity or the gross domestic product of the nation. India was always a nation with good economic status in history even before Christ except for the period between 1700 and 1950s. In present day scenario with technically skilled manpower resources, natural resources and a supporting system with political and legal stability, India stands as an economic power in eastern part of the globe.

 

Amendment of acts and policies, investment favorable taxation and other documentation process for starting a company, availability of human resources, have all contributed to growth of the nation. All these factors have attracted potential investors in India and from around the world to seed their money in Indian soil.

 

Savings and deposits based investment: The Reserve Bank of India allows Non Resident Indians to hold accounts in Indian banks. There are different types of deposit schemes based on the type of account. Joint holding is also allowed in these accounts subjected to certain limitations. This can be a good investment option for NRIs who have parents or blood relatives in India. If the NRI owns a property in India, all transactions related to the property can be dealt with in this account. NRIs don’t require any specific permission from RBI to open these personal accounts. However there will be specified limitations related to the usage of these accounts.

 

Growth and long term investments: NRIs who are willing to invest money in shares of growing companies in India have the option to invest in mutual funds, fixed deposits, shares and debentures of companies. There is general permission provided to NRI to invest in these options. The limit of investment, type of company and few other factors are subject to regulations of RBI and SEBI. Based on whether the investment made is repatriable or not, there are certain procedures that are to be followed while investing in these schemes. The NRIs are also allowed to invest in Government securities and National Savings Certificate. The regulations on such investment schemes were relaxed recently and with time there are possibilities of further provisions to encourage NRI investors to invest in India.

 

Investment based on both growth in value and security: There are NRIs who are interested in converting their money into property, so that it remains as a security on long term basis while the value of the investment grows with time. Investment in land in India is the best solution for people with this ideology. The value of immovable properties in India is something that has seen rapid growth trends since few decades. After 2005 NRI were provided an opportunity to purchase land in India. This has increased the value of land in the market. NRIs are permitted to purchase land for building homes and also for business (with special approvals). However NRIs cannot invest in agricultural land in India.

 

Foreign Investment promotion board helps NRIs by sorting out approval matters related to investment options that do not gain general permission in India. The right potential levels for economic growth of companies in India, political stability of the nation, high resource levels, and favorable foreign investment policies have all created a perfect atmosphere for investors to invest in India. It is not a surprise if Non Resident Indians are interested in parking their funds in India.