Investing in India is a great way to create wealth while helping the country's economy. Some NRIs plan to return to India while others simply want to participate in the Indian Economy.
Moreover, it's an opportune time to invest in India - we have a strong and stable majority government, a lot of foreign investment is flowing into the country and the world has its eyes set on the Indian market due to its immense scope for growth.
As the Founder of Cube Wealth, I often come across NRIs who are interested in investing in India. Interestingly, even those who don't know about how easy technology has made things are investing in India. People are jumping through financial hoops to invest in India and understandably so. India is one of the most promising economies in the world and every smart investor wants a piece of the action.
The fact that India is a developing nation means we have vast potential for growth across sectors. We also have a large youthful population that can support multiple industries. India has always been a source of cheap labour and that holds true even today. All these factors seem to be encouraging more and more NRIs to invest in India and this trend is only going to grow in the future. Today, there are multiple reasons for a Non-Resident Indian to invest in India.
To begin with, it’s a great way to protect your money from being dependent on the growth of just one economy. What also encourages NRIs to invest in India is that its a developing nation and our economy has a lot more potential for growth than mature markets.
This is true across investment modes with everything from Fixed Deposits to real estate and mutual funds now being accessible relatively easily to NRIs today. Those who are in it for the long haul may even earn a lot more returns by investing in the Indian market than they would in say a standard index fund abroad.
The aim I've noticed is often to create a nest egg for when they return to India or for their families and children. Moreover, the best investments are those that are both logically and emotionally satisfying. When NRIs invest in India they get to invest in companies they love and help further bolster India's economy.
Foreign investors are also a key source of capital for the Indian economy. As of now, NRIs invest in the Indian stock markets through something called a portfolio investment scheme (PIS). These schemes are governed by the Reserve Bank of India (RBI) and come with several restrictions.
For example, NRI investments are subjected to tax deduction at source (TDS). While this does not discourage many investors it is still a deterrent. It would be great if NRIs are given the opportunity to invest in more Indian funds.
As of now, about eight to ten fund houses accept NRI investments in mutual funds for those residing in the US & Canada. The rules for other countries are more relaxed.
As technology makes managing investments easier it is likely that more and more NRIs will invest in India. Today one can simply automate investments and get tailored wealth advice from experts, in the future things will be even simpler. It is a great time to participate in the growth of the Indian Economy and grab a healthy piece of the pie while at it.
The Author, Satyen Kothari is Founder & CEO of Cube Wealth