Mad Money Why Should NRIs Invest In India? 31 July 2024 / By: Smita Chaudhari READ TRANSCRIPT Investing in India as an NRI. Hello NRI friends. You are among the 32 million Indians residing outside India. Many of you embarked on a journey years back... for better job prospects and higher career opportunities. You excelled. You made significant contributions in various businesses worldwide. We are proud of you… mainly the way you are maintaining our traditions abroad. You perhaps don’t know this… But, your most valuable participation is the key role you play in India’s economic progress – a remarkable NRI contribution of 3.4% to India’s GDP. Your way of showing your love for India. Good morning! I’m Smita Chaudhari, an Independent Financial Advisor and blogger @ Gin n Sardonic. Today we are going to be talking about why more and more NRIs are investing in India. And, why you should, too. Naturally, you would have questions like – What are my investment opportunities in India? Does it even make sense to invest in India? Am I going make more money than what I am going to put into the investment? Will I lose value of my purse money in dollar terms? Let’s first see the investment landscape. Over the years, India has made substantial strides, emerging as the key player in the global landscape. Some recent achievements include 1.successfully hosting the G20 Summit in 2023, 2.Securing India’s current position as the world’s 5th largest economy – aiming to be 3rd largest by 2027, 3.Showcasing an impressive growth of 65% in Foreign Direct Investment (FDI). 4. Stock market performance comes because of the growth in the economy. That is the primary driver. Unless there is growth, stock markets will not climb up permanently for long periods of time. In the words of Ridham Desai of Morgan Stanley, “if you look at the growth prospects of any country in the world, it is very fair to say India is the only major country where growth is happening. There is a huge domestic demand as well as export growth. 5. India’s Make-in-India program has the world majors setting up factories in India. 6. And, targeting exports to the tune of $2 Trillion by 2030. India has a market and everybody wants to gain access to it for next few decades. There are incentives that the government is giving to overcome the cost of doing business. It speaks volumes about the strength of the Indian market, the growth of the economy and the prospects in India. Now, this is interesting. When the US started increasing the interest rates in 2022, the Foreign Institutional Investors – FIIs - started pulling their dollar investments out of India. Then how did so many dollars come in India? And how did it not impact the markets so much even though US had increased the interest rates from zero to the present level and the FIIs were pulling out their dollars? Because – firstly, A great amount of foreign direct investment or FDI inflows came into the country for the purposes of establishing business operations. And secondly, the NRI community poured in helluva lot of money in India - the highest NRI inflows ever – setting a world record @ 87 billion dollars in 2022. India is still retaining the top spot as the largest recipient of remittances, at USD 125 billion in 2023 (equivalent to 10 Lac Cr in INR). Now the ambitious goal is to reach a $5 trillion economy by 2025. Looking forward.. there’s something else is noteworthy. Due to geopolitical shifts, we are observing a gradual transition of the world's balance of power from the west to east; the Russia-Ukraine conflict has emerged as a critical turning point for the move away from the dominance of the dollar in international trade; and India is at the forefront of this shift. Banks from 22 countries have opened special Rupee vostro accounts in Indian banks in order to trade in local currency. This is a part of de-dollarization plans. And these are not from any pushover lands like Africa but from countries like Russia, UAE, Saudis, Germany, Italy, New Zealand and so many other countries. 73 countries across the globe today are showing interest to deal in India using the rupee account. And lastly, India has built a top-notch digital infrastructure called DPI, which includes things like digital identity, payments, and data exchange. This digital setup is boosting the economy and making big positive changes. It’s being hailed as a model and other countries are looking at India as a great example to follow when they want to upgrade their own digital systems. That’s why India presents a fantastic investment opportunity for NRIs. Well, that’s all for now. Next, I’ll delve into some specific investment options available for NRIs in India. Like – Mutual Funds, Insurance based investments, National Savings Pension, Equities & stock, Real Estate, Bank Deposits, QROPS. You can also protect your investments by forming a Will & Trust. At Gin n Sardonic, we specialize in making your money work for you without taking a vacation. If you need assistance with investments, feel free to reach out to me. Ciao. Share on