Where should NRI invest money in India?
Indian economy is a rising tale, a flying plane which is only expected to fly even higher in the coming years. Our economy has just started a long bull race, experts conclude. So, it’s a high time for the entire well doing non-resident Indian community to turn back to their mother country. They should consider investing in India, not solely for the reason of patriotism but also for quickest and safest returns on their investment.
If you are also an NRI and considering investing your money in India, here are the top options for you:-
- Real estate: – First of all, let’s clear all the myths that NRI can’t avail a home loan in India or they can’t buy land in India. Yes, NRI can’t buy agricultural land but surely they can buy immovable assets in industrial or housing projects. Secondly, almost every bank provides loan to NRIs to be able to purchase land. Real estate has been traditionally a favourite investment option for NRI due to rapidly rising land/flat prices particularly in urban settings. Alongside, they can earn extra money by giving the flat on rent.
Still, many experts argue that it’s not the ideal route to invest money. Money should be kept in liquefied form so that you can quickly invest and dis-invest; money gets solidified in real estate leaving little or no room for short term decision making. However, if you plan to invest in long-term, buying property is a good decision to take.
- Direct equity: – Direct equity has proved itself one of the best returns giving machine. However, investors in this case are advised to have patience as it shows better results in long term. You need to open a Demat account (linked with your PIS account number) or a trading account with a local broker to get into direct equity. Every transaction related to your PIS account with be monitored by RBI; this is because RBI ensures that NRIs don’t hold more than 10% of any Indian company’s shares.
You can opt for either of 2 routes to invest in direct equity; through equity mutual funds or portfolio investment scheme (PIS). With the BSE touching new heights every week, investing in small and mid-cap mutual funds also seems to be a great decision.
- Mutual funds: – In the last decade, mutual funds have given 12-15% annual return rates in general. First option remains to invest in any India-focussed mutual funds or EFT operating in your country; they are generally umbrella organizations which invest in a number of Indian companies. You can also invest in mutual funds which are domiciled in India, using your NRO or NRE account.
Handling the mutual funds require lesser expertise as compared to the direct equity. Generally, investing in Indian mutual funds requires no approvals from anywhere; still, a few mutual funds have certain restrictions on NRI based in US or Canada. If you belong to US or Canada, please go through all the investment policies carefully in order to avoid the hassles in future.
- Saving and deposits based Investment: – RBI permits you to hold an account in Indian banks. Deposit schemes are many including FCNR or NRE account, you can participate in an NRI fixed deposit scheme or you can hold a joint account, joint account is particularly good if you have blood relatives in India. If you own or want to buy property in India, all the transactions related to that can be dealt with this account.
With the new and stronger Govt. at centre, many taxation laws have been simplified or modified to suit the investors. India has huge returns on investment potential. Making good and beneficial investments help you perform and live better in longer run; all you need is a little patience along with a careful planning regarding which investment option would suit you best.