8 Reasons Why NRIS Should Invest in Property in Mumbai
Feb 9, 2023
Today's exchange rate for a dollar stands at ₹82 and is not looking to move down anytime soon. Though this might not serve as good news for Indian immigrants overseas, it is the most appropriate time for NRIs to invest in the country of their ancestors. Undoubtedly, India remains one of the developing nations globally, with an expected growth rate of 6.4% for 2023-24, making it a land of opportunity and investment.
The depreciation of the Indian rupee serves as an opportunity for NRIs residing USA, Canada, the Middle East, the UK, and many countries of Europe, with the conversion rate working entirely in their favour. Some of the popular choices among NRIs when it comes to investing in Indian cities are NCR, Bengaluru, and Hyderabad.
Governed under the FEMA (Foreign Exchange Management Act) regulations, NRIs can purchase residential and commercial properties and receive immovable property as a gift or by inheritance, with not many legal formalities involved in this case. As the Indian real estate industry witnesses a shift of dynamics, providing top-class infrastructure, amenities, and sustainable living, there isn’t a better time to put your money, whether residential or commercial.
As the Indian real estate market looks to touch estimated ₹13 lakh crores, here are some reasons for NRIs to park their money.
1. Diminishing value of Indian currency
The INR has been on a consistent downfall since experiencing an 8.6% drop in 2018 to an all-time low of ₹82. The global pandemic has further impacted the rising interest rates and petroleum prices. While this is a challenge for Indian citizens, NRIs, especially those living in countries with stronger currencies, can leverage this opportunity by investing in their homeland.
2. Diversifying their investment portfolio
Many of the NRIs have their families and friends living in India. Hence, having their second home in their native country helps them reconnect with their roots. The non-resident can also let out their property on lease, serving as an additional source of income.
3. The rapid growth in the economy
As discussed earlier, India is a resurgent economy, the most significant proof of this being its ability to endure the aftermath of COVID-19, which shook some of the strongest economies. The rising disposable income of the middle class and purchasing power are other examples. Therefore, an NRI can maximise their ROI as years pass by.
4. High resale value
When it comes to preferred choices of investment, real estate remains a safe bet, especially given the current economic and political climate in the world. The recent fluctuations in securities, gold and stocks have only increased the reliability factor for ROI results in real estate.
5. The regulation in real estate
The government and concerned authorities continue to take measures to protect the interest of the realty buyers, establishing governing bodies and introducing acts like RERA and FEMA, helping build the trust of the NRIs when making investments in real estate.
6. Commercial investments
Having the benefit of currency exchange, an NRI could maximise the opportunity of investing in commercial properties as they provide better returns. With the tenant wanting to attract customers to the property, they will ensure proper maintenance, removing the hassle of constant monitoring for the landlord.
7. Streamlining of processes by the RBI
To attract further investment from foreign land, the RBI has reduced the need to apply for prior approval for NRIs in the case of immovable properties in India. Nonetheless, in the case of making investments in agricultural land and farmhouses, the need for consent remains.
8. Tax benefits
Like any other Indian citizen, an NRI can have the right to deductions 80C and 80TTA under the Income Tax Act while also enjoying the indexation benefit for properties held in India. Being a beneficiary of foreign currency, a streamlined taxation process only makes things better regarding investment from overseas.
The bottom line is that this is the perfect time for an NRI looking to invest in India's real estate sector. As the country continues to grow by leaps and bounds, individuals of Indian descent can get top-quality services and goods at better rates than where they reside. Adding to the emotional quotient, this also opens up the gates for them to come and visit their roots and reconnect with them.
The recent pandemic has made many realise the value of their loved ones, with some NRIs even shifting back to live with their parents. Unfortunately, the currency value of India is losing hold. However, with the current solid foreign policies and international positioning, it's only time before the exchange rates swing in our favour. An NRI can purchase a much larger property in India than what is available back in their respective countries, providing them with the dual benefit of luxury living and living in their home country.