TRENDS FOR NRIs

Few trends that will affect NRIs coming to India:

The real estate sector in India is undergoing a self-organization from being a highly unorganized sector. This has been one of the most crucial factors for India gaining its status as a highly favored investment destination through FDI and funds. India has a huge market potential.

1. It is the fifth largest economy in the world (ranking above France, Italy, the United Kingdom, and Russia) 
2. It has the third largest GDP in the entire continent of Asia. 
3. It is also the second largest among emerging nations. 

Indian Real Estate sector: Facts and Figures

1. Estimated size of organized Indian real estate sector accounts for USD 12 billion of India's USD 600 billion economy; just 2% way less when compared to mature economies. 
2. Relaxation of FDI rules has brought about capital gains in every sector of Indian economy. The government is making efforts in liberalizing the guidelines and norms for investment through FDI, making them more NRI friendly.
3. Growth in the Indian real estate sector - an estimated 30% last year, owing to FDI norms and related growth drivers, By 2010, real estate sector estimated to be between USD 45-50 billion (Source: DSP Merrill Lynch) 
4. Real estate sector has the potential to touch USD 90 billion in 10 years.
5. The real estate prices in general are on the upswing in all markets across sectors since last two years
6. An estimated 5 million homes were sold in 2005-2006. 
7. In the next five years, the sales is expected to cross the 30 million homes mark.
8. Second homes: The trend of owning exclusive properties like beach houses, homes in the hills, near religious centers etc is growing fast. 

So this is one of the best sector to invest right now.

NRI Remittances refer to the money sent home by NRIs to their homeland or home towns. NRI remittances as equivalent to prevalent remittances in other countries globally; have been playing a pivotal role in economic growth of India just as across the world.

India enjoys the status of receiving the highest remittances in the world. With an increasing number of Non Resident Indians (NRIs) living overseas, either for work or having settled there, flows into the country have certainly grown dramatically in the past few years. The figures have gone up touching US$ 23 billion in 2006, up from US$2 billion a year in the late 1980’s. Interestingly, a large chunk of this money is flowing into the India’s promising property market. 

Several factors have contributed to this increased remittance to India on the part of expatriate Indians or NRIs. The continued tax exemption on interest income has worked as an incentive. In the early 1990s, when the country was experiencing a balance of payment crisis, NRI deposits were given tax benefits for attracting foreign exchange.

An upsurge in NRI deposits can be attributed to incessant tax exemption, attractive interest rates and better facilities provided by banks and finance institutions in India. This has led to a large inflow during FY06 as against the outflow during the last fiscal. Many NRIs also found it attractive to invest in India considering the higher rates of interest as compared to other countries.

After Foreign Direct Investments (FDI), remittances have emerged as the largest external capital source for developing nations like India. Amount of NRI remittances have been exceeding FDI inflows in India for the last few years.  The chart below shows the NRI remittances started rolling over against the FDI in India.

Check out the comparison chart for FDI inflows and NRI remittances in India.

These are a few things which are enouraging more and more NRI to invest in India and thus we are witnessing a high growth phase.