Business Mantra: Faridabad
India being a fast developing country, has always provided good investment opportunities to NRIs and foreign nationals. Presently our Prime Minister Mr. Narendra Modi has created optimism in people’s views all over the world about India.
Most of NRIs want to invest in India and for them million dollar questions are:-
- What are the Investment options in India?
- Which one is the best option?
In this article, Business Mantra team has compiled various options for Investment in India for NRIs. Some of the most famous and liked investment options are as below:-
1] NRE FIXED DEPOSITS & NRO FIXED DEPOSITS:-
NRE [nonresident external] fixed deposit account and NRO [nonresident ordinary] fixed deposit accounts are:-
- Accounts of nonresidents in Indian banks. These may be any one of Saving account, Current account and Term Deposit account.
- Funds are to be kept in Indian Rupees.
- In NRE account the money comes by fund transfer from abroad.
- In NRO account the money comes from local income of non-residents like Rent, Dividend etc. earned in India.
- These accounts offer very good return / interest income in comparison to deposit accounts in many developed countries.
- Presently the rate of interest in these accounts is up to 9% p.a.
- Interest earned is tax free in India but may be taxed in the country of their residence.
- There is one threat with these accounts as money is kept in India rupees and when the non -resident account holder wants to convert the funds into foreign currency then the risk involved in foreign exchange rate fluctuations are there.
- FCNR (foreign currency Non Resident) account:-
- These accounts are also like NRE/NRO accounts, but money is kept in foreign currency.
- Risks related to foreign exchange rate fluctuations are not here.
- But one shortcoming with FCNR accounts is that rate of interest in comparison to NRE/NRO accounts is, much lower.
- Interest earned is tax-free in India. They may be taxed in the country of their residence.
- For those who want high returns and open to higher degree of risk.
- Indian equity market has better return than stock markets in many developed economies.
- It is not only advisable but necessary also that the investor must study the market and should take decision with proper technical analysis and basics study of various companies before entering in equity market.
- Mutual funds exchange traded funds, bonds and investment certificates etc. are also some of the options other than equity.
- Real estate:-
- India is a growing country and in a growing economy, the infrastructure development is a continuous process and when and where it takes place the property prices in those areas and adjoining areas gets a boost.
- Presently, modi government has given lots of thrust on infrastructure development and is in a process of making 100 smart cities, so at this point of time and with above discussed view point India is a better destination in comparison to various other developed and developing countries for earning profit from real estate investment.
- Real estate Investment Trust (REIT):-
- Instead of investing directly in Real Estate , investment in REIT (Real Estate Investment option ) is a better option for many reasons listed below:-
- Liquidity is much better
- Problems relating to registration process and other paper formalities are not there.
- These trusts invest in multiple locations and are assisted by senior property consultants, such informed investments are not possible or are very difficult for individual investors
- The only shortcoming is that person does not become owner of any property.
In our further articles we would take each option (bank accounts, real estate, and equity) along in detail along with some more discussion on investment certificates, bonds and mutual funds etc.