NRI Real Estate Investment in India: Top Opportunities

In recent years, the country has witnessed significant economic growth due to factors like government reforms or infrastructural development. Along with this, digital transformation and the growing consumer market act as a catalyst for such magnification.

Such burgeoning activities have created a favourable environment for NRIs to invest in India's evolving economy.

Join us to explore the various investment opportunities for NRI in India that are available today.

Present financial conditions of the country

The surge in foreign remittances to India is fueled by the global economic changes. Smashing all records, the country recorded $112 billion in Inward Foreign Remittances in FY23, touching the summit in the last 5 years after the catastrophic impact of the pandemic.

As discussed above, it is underpinned by numerous seismic shifts globally, presenting opportunities to NRIs. For foreign investors looking to diversify their investment portfolio, the following sectors stand as a ray of hope.

Let us check out the best investment plan for NRI in India 2024.

Real estate

Luxurious apartments

The preferred investment goal of NRIs is to move towards the Indian growth market to generate wealth. Shifting from the FD or NPS, they are prioritizing real estate. The posh residential projects redefine the concept of premium living in India. These meticulously crafted apartments are strategically located in prime neighbourhoods, offering easy access to key amenities like schools or hospitals.

Venturing into the next year, the pattern suggests that they will continue to invest in luxurious apartments. As reported by NoBroker, NRI investment in India real estate is poised to shoot up to 20% by 2025. An amalgamation of a number of factors like commendatory government policies and high rental yields backs this estimate. Apart from these, deep emotional connection and the tenacity displayed by the real estate market during the COVID times influence such decisions.

Investing in Piramal Reality’s luxury apartments can offer a sturdy stream of rental income, especially in high demand areas. This landscape promises a frontier for investors, with cities like Delhi, Mumbai, and Bengaluru leading the change. These properties attract tenants seeking premium living experience, ensuring a consistent revenue stream.

Office space

Investing in commercial real estate offers a blend of stable rental in command potential capital appreciation. With the growing demand for office space in India's thriving cities, this asset class presents a lucrative opportunity for the NRIs. While Bengaluru and Mumbai are preferred destinations for these investors, smaller cities have also experienced a boom due to the propelled demand.

Commercial offices come with long-term lease agreements that provide a study of the stream of rental income. As the economy continues to grow, the value of such areas will likely appreciate over time. Apart from diversifying your investment portfolio and reducing risk, such properties provide professional management, reducing your maintenance headache.

In essence, the market is ripe for innovation; to verify, one just needs to avert their gaze to the growing skylines of Mumbai to get a visual illustration. One must note that real estate is not a tax-free investments for NRI in India. However, benefits might be available, such as a deduction for home loan interest and capital gains revenue exemption. For instance, reduction for repayment of principal on house loans and interest payments. Meanwhile, taxes can be imposed on rental income and capital gains from property sales.

Stocks and bonds

NRI can invest in multiple sectors like:

• Mutual funds
• Direct investment
• Government bonds

RBI guidelines for NRI investment in real estate

The Reserve Bank of India provides specific regulations for international investors. They aim to regulate foreign exchange transactions and ensure compliance with the country’s laws.

• RBI guidelines for NRI investment in India state that they can generally purchase residential or commercial property without the Reserve Bank’s approval.
• They can repatriate the sales proceeds of up to two properties in India, subject to certain conditions.
• Such assets must have been purchased using foreign exchange. Moreover, there is a cap of $1 million per fiscal year for the total amount that can be repatriated.
• Apart from this, NRIs cannot purchase agricultural land or farmhouses in the country.
• They cannot receive real estate as a gift from a resident Indian.
• In case an NRI is unable to manage their property in the country personally, they can appoint a power of attorney to act on their behalf.
• All such real estate transactions must comply with the FEMA regulations.

In a nutshell

After considering the whole picture, the real estate sector in India is looking bright. The various amplifying factors not only create a demand among the NRI but also from other foreign investors. Thus, one can conclude that this sector is on the verge of demand that the nation has not experienced before.

Disclaimer- This article is based on the information publicly available for general use. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.