Know About NRI Investment Opportunities in India

India is considered an upcoming economic power. By 2025 India is expected to be the second-largest economy in the world as per a report by PwC. In other words, any investment in India will work out well for an NRI who is looking to invest.

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If you were to look at NRI investment options in India, you’ll see option such as -

1. Direct Equity

Invest in the stock market directly by purchasing shares of companies. NRI deposits can diversify their portfolio with direct equity, offering good money investment ideas for potentially high returns. Stay informed about market trends to make the best investment decisions.

2. Mutual Funds

Mutual Funds are a valuable investment option for NRIs in India, excluding those in the USA and Canada who face specific restrictions on available schemes. These restrictions may require additional information during the purchase and, in some cases, during redemption.

NRIs can tailor their investments to their risk profiles by choosing from a variety of mutual funds, including equity funds, balanced funds, debt funds, liquid funds, and MIPs. Profits from non-equity funds sold within three years are considered short-term capital gains and are taxed at 30%. For non-equity funds held for over three years, they become long-term gains and are taxed at 20% after indexation.

Taxation in mutual funds for NRIs follows similar principles as for resident Indians, with the distinction that Tax is Deducted at Source (TDS) by Mutual Fund Companies. Detailed information on TDS and refund procedures can be found in our comprehensive post on the topic.

Well-managed Indian mutual funds offer the potential to outpace inflation over the long term, managed by experienced professionals, which reduces inherent risks compared to direct stock investments.

Various investment options are available, including Systematic Investment Plans (SIPs) for regular contributions and Systematic Withdrawal Plans (SWPs) for consistent withdrawals. NRIs with income in India can also explore Equity-linked savings schemes (ELSS) as a favoured tax-saving instrument.

3. Fixed Deposit

A safe and secure investment option, fixed deposits provide guaranteed returns over a specified tenure. For NRI deposits, fixed deposits are a reliable choice among good money investment ideas, offering a stable and risk-free avenue to grow wealth.

4. National Pension Scheme (NPS)

The National Pension Scheme (NPS) offers NRIs an attractive retirement savings avenue. NRIs can easily open NPS accounts with a PAN or Aadhaar card, linking them to their NRE or NRO accounts for convenience.

For those aged 18 to 60, an NPS account can be initiated through a Point of Presence (PoP) in India. You have the liberty to choose asset allocation, with automatic adjustments based on age if preferences aren't specified.

Below 60:

• Minimum 80% must be annuitised, offering a pension, and only 20% is withdrawable.
• Total corpus less than Rs. 1,00,000 permits full withdrawal.
• Note that annuities and maturity amounts are taxable.

At 60 and above:

• Minimum 40% must be annuitised, allowing up to 60% withdrawal.
• Total corpus below Rs. 2,00,000 permits full withdrawal.
• Pension/annuity payments are in INR, so consider aligning your NPS account with your NRE/NRO account at the same bank.

However, assess other investment options if you're concerned about NPS withdrawal rules, liquidity, and taxation. NPS suits NRIs planning to settle in India post-retirement, but it's wise to evaluate your financial goals before committing.

5. Public Provident Fund (PPF)

PPF is a government-backed, long-term savings scheme offering tax-free returns. As one of the best ways to invest money for high returns in India for NRIs, PPF provides security and tax benefits, making it an attractive investment option for long-term financial planning.

6. Real Estate

Real estate investment involves buying, owning, and managing properties for potential appreciation or rental income. Considered a solid option among good money investment ideas, real estate provides NRI deposits with diversification and a tangible asset for potential long-term gains. Additionally, certain tax-free bonds in India for NRIs can complement real estate investment strategies.

Which City in India is Best for NRI Investment?

Financially, however, this might not be the best thing to do. Yes, it’s true that price appreciation is different for different cities. In a city like Jaipur, appreciation is slower and in Delhi, your investment will appreciate much faster. 

However, there are a few cities that have seen interest grow (from February to August). These are:

• Mumbai 119% increased interest
• Bangalore 72% increased interest
• Pune 129% increased interest
• Chennai 74% increased interest
• Hyderabad 92% increased interest

Therefore if you’re looking to watch your investment appreciate and see a steady rise quickly, then it is better to go with cities like:

• Mumbai
• Delhi NCR
• Bangalore
• Chennai
• Ahmedabad
• Hyderabad
• Pune

These cities are metros, there are innumerable job options here and this is what drives people to migrate and come to these cities.

When you are looking for NRI investment options in India, you should not have to make decisions based on who will take care of your property when you’re away. This will greatly limit your options and hamper you from making the best investment your money can get.

When you work with a company like NoBroker, you can trust that your property is in safe hands. The Property Management for your Rental Home by NoBroker offers –

• Guaranteed rental income
• Free tenant search
• Tenant background verification check
• On time rent collection
• Periodic home maintenance
• Free rent agreement services
• Periodic home inspections
• On demand repairs

And the best part is, you get a dedicated Relationship Manager that you can connect with at any time. They will provide you with updates on your property so that you know everything that is happening and have nothing to worry about.

If COVID has made us realise anything, it is that having a home is very important. We can see that people are changing their spending and investing habits, but their desire to own a home has only intensified. People have started using online portals such as NoBroker to find property, this has made looking for homes safer and contactless. Government policies like lowering interest rates and the repo rate have also helped people look at Real Estate as a very worthwhile investment option.

For NRIs the falling rate of the rupee has driven demand in the real estate sector, there are many affordable housing projects that are looked at as ideal an investment. So, in short, YES, there is a huge benefit to investing in Real Estate, even post the pandemic this sector will see growth.

There is a huge change in this number, the factors listed above have created a stir and at NoBroker itself we see that many more NRIs are looking to invest in Real Estate now than before. Here are the changes we see -

Interest from NRI customers has gone up by 254%

76% of NRI customers look to invest in residential properties.