Opportunity

Investment Opportunities for NRI Entrepreneurs in India

India has become an attractive investment destination on account of the growing popularity of Indian leadership and the country's improved foreign relations
Investment Opportunities for NRI Entrepreneurs in India
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Head - NRI Business, IIFL Securities Ltd
4 min read
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By end of 2018, the economy is expected to recover, as the impact of demonetisation and GST transition fade away. As per IMF estimates, India will become the fastest growing economy in the world outpacing China in 2019. IMF retained its India’ s GDP growth forecast of 6.7per cent and 7.4per cent in 2017 and 2018 respectively and pegged 2019 GDP growth at 7.8 per cent. India has typically recovered much faster than other prominent nations after global economic slowdown events such as dot-com crash, 9/11 crash or 2008 financial crisis thus showing signs of a maturing, stable economy.

Indian Equity market cap is likely to rise to $6.1* trillion by 2027 and hence India is expected to grow @10.1 per cent* CAGR for the next 10 years. India is still behind most developed and emerging nations in some of the key industries and offers a huge potential runway for foreign investors.

FDI in India

Under Liberalized FDI Regime Most of the sectors are under automatic approval route and sectoral caps across major sectors including defence and aviation has been increased to 100 per cent. Under Infrastructure Push, a five-year plan has been rolled out to build 83,677 km of roads under Bharatmala Project and housing for all by 2022. New Insolvency Code is also building confidence among investors and lenders. Steps taken by the current government has resulted in India ranks in ease of doing business to the current 77th position from the 142nd position in the year 2014 resulting in investors’ confidence in establishing or investing in various business opportunities in India.

Considering the resilient economy with growth opportunities and strong regulatory structure Indian markets are well placed to attract incremental investment through various avenues under Foreign Direct Investments, Foreign Institutional investors in various assets classes of Equity, Debt, Alternate investment funds, Real Estate and Estate funds.

Foreign Inward Remittance

India also being the largest foreign inward remittance receiving country during last 5 years to the tune of US $ 65-70 Billion YOY through it vast affluent Indian Diaspora across various geographies has become a lucrative destination for expats to invest in various investment opportunities in India. The current trend of depreciation of rupee against the dollar makes investment opportunities in India more viable and gives considerable arbitrage opportunity across asset classes.
 

India offers various avenues of investment for NRIs – Ultra HNI, Business Owners and Affluent retail NRI investors in extensive investment product suite offered by various financial institutions in India.

NRIs and Overseas Citizen of India (OCI) on repatriation basis without limit invest in instruments like Government dated securities, Treasury bills of Domestic Mutual funds, Bonds issued by PSU in India, Bonds issued by infrastructure debt funds; listed non-convertible/redeemable preference shares & Debentures, National Pension schemes governed by Pension fund regulatory authority. Additionally, they can also invest in units of money market mutual funds on non–repatriation basis.

Direct Equities For NRI’s

Affluent NRIs and NRI Business owners can also invest in direct equities through Portfolio investment scheme route in secondary markets in India within the prescribed limit of 5 per cent paid value of shares issued by the companies through they are designated repatriable and non-repatriable bank accounts held with Indian banks. Non-Resident Indians can also invest in exchange-traded derivative contracts approved by SEBI from time to time out of INR funds held in India on a non-repatriable basis subject to the limits prescribed by SEBI.

Under Liberalised investment guidelines Foreign Institutional Investors (FPI) provides for platform for NRI business owners and Ultra High net worth NRI individuals to participate in Direct & Private equity, Listed & Unlisted non-convertible debentures & bonds, listed redeemable preferences shares, Securities receipts of ARC companies & Government securities and Units of Domestic Mutual fund within permissible regulatory guidelines issued by RBI from time to time. Individual NRIs can also invest in Real estate and Real Estate funds from their repatriable and non-repatriable banks account

Bonds and Mutual Funds
Besides Equities, bonds and mutual funds, Alternate investment funds which are a privately pooled investment vehicle can collect funds from sophisticated investors like NRI Business owners for investing in accordance with defined investment policy or purpose for benefit of investors. NRIs can invest across various categories of AIFs registered under respective categories for the specified purpose as per guidelines issued by SEBI.

Most of Banks and financial institution provide complete Financial and Investment advisory product suite to address various financial needs of Affluent NRIs &  NRI Business owners looking to establish a presence in India either through investment or business route.

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