An NRI, commonly known as a non-resident Indian, denotes an Indian citizen who, in the course of a fiscal year, spends a minimum of 182 days residing outside the territorial boundaries of India. Notwithstanding their physical absence, NRIs retain intimate affiliations with their country of origin.
This expansive and heterogeneous community encompasses an estimated population of around 30 million dispersed across diverse global locations. NRIs embody a rich tapestry of cultures, languages, and professions, thereby rendering substantial contributions to their adopted nations while simultaneously nurturing their intrinsic Indian heritage.
Why are NRIs investing in Indian Real Estate?
Within the domain of the Indian real estate market, non-resident Indians (NRIs) are presented with a multitude of opportunities to invest in residential, commercial, and industrial properties strategically. The estimable cohort of approximately 30 million NRIs residing abroad has witnessed a discernible surge in their investments within this sector in recent years. The salient advantages that allure NRIs to engage in such ventures encompass favourable currency exchange rates, resilient rental yields, and the potential for appreciating property values. These factors collectively contribute to the compelling appeal of real estate investments for NRIs, substantiating their profound significance within the market.
Potential Returns
NRIs perceive the realm of real estate investment in India as an enticing opportunity brimming with the promise of augmented financial gains and portfolio diversification. These astute investors exhibit a pronounced penchant for directing their resources towards flourishing urban centres like Gurgaon, Bengaluru, Hyderabad, and more.
Interestingly, there has been a notable surge in NRI’s inclination to procure expansive residential abodes within their cherished hometowns, particularly in Tier 2 cities. Such an intriguing trend can be attributed to the transformative impact of the pandemic on Indian family dynamics. In response to the changing circumstances, a growing number of individuals now seek to embrace the cherished values of togetherness by residing alongside their beloved parents and grandparents, thereby fortifying the time-honoured tradition of the extended family system.
Rapid Growth of the Market
The exponential surge in the market has brought about a discernible shift wherein traditional investments are being supplanted by stock-based instruments among Indian investors. This remarkable trajectory, driven by escalating market and stock valuations, has created a propitious environment for investment in India.
Favourable to Investors
In light of the Indian government’s amicable disposition towards foreign investors and the proactive initiatives undertaken by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) to facilitate Foreign Direct Investments (FDI), NRIs are redirecting their investment focus towards India. This conducive landscape, characterised by supportive regulations and guidelines, has contributed to the growing confidence of NRI investors in exploring investment opportunities within the country.
Projections from various sources suggest that NRI investments in India are poised to reach new heights, with estimations indicating a significant surge to INR 96 crore in the fiscal year 2021. Notably, the establishment of the Real Estate Regulatory Authority (RERA) has played a pivotal role in catalysing this unprecedented inflow of real estate investments. NRI investors find solace in the fact that properties are registered under the purview of RERA, working with reputable developers, and benefitting from a streamlined engagement process.
Source: This article is contributed by Mr. Aditya Kushwaha, CEO & Director, Axis Ecorp