The Emerging Giant: Investing in India’s Thriving Economy
NRIs have unique investment opportunities in India's thriving economy, offering diversification, growth potential, and attractive options.
October 14, 2023
3 mins read

Introduction

India is one of the fastest-growing economies in the world, and as a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI), you have a unique opportunity to invest in this dynamic market. In this article, we’ll discuss why investing in India can be a smart move for NRIs and the investment opportunities available to them.

Why invest in India?

India has a vibrant economy with a young and growing population, a booming tech industry, and a thriving consumer market. The country’s GDP is expected to grow by around 30% by 2025, making it one of the fastest-growing economies in the world. This growth is being driven by various factors, including government reforms, foreign investment, and a growing middle class.

Some stats on the same:

  • Median age of Indian population is ~28 years, vs ~38 years for US and China
  • Urban unemployment rate has reduced from ~9% to ~7% in the last two years
  • Indian consumption is slated to more than double by 2031, as 87% of households cross the $5000 income, vs only 62% currently.
  • Along with consumption, India’s share of manufacturing and exports are also poised to grow significantly
  • With India’s labor advantage vs the developed world, global spend on outsourcing in India is estimated to grow from $180B to $500B by 2030

Investing in India can be a smart move for NRIs for several reasons -

First, investing in India can provide diversification to an NRI’s investment portfolio to growth, while most of the portfolio stays in value investments in your home country.

Second, NRIs have a good understanding of the Indian economy and culture, which gives them a competitive advantage when investing in the country.

Third, the Indian government has introduced various measures to attract foreign investment, such as liberalizing foreign investment policies and offering tax incentives.

Types of Investments

There are several types of investment options available to NRIs in India. Here are a few:

  • Equity: Investing in Indian stocks can be a lucrative option for NRIs. India’s stock market is the third-largest in Asia and has outperformed many other markets in recent years.
  • Mutual Funds: Mutual funds are a popular investment option in India. NRIs can invest passively in mutual funds, reaping the benefits of growth without the hassle and risks of active stock-picking.
  • Fixed Deposits: Fixed deposits are a safe and low-risk investment option in India. You can earn interest on your deposit, and the rate of interest is 75% higher (7% vs 4%) than that offered by banks in the US.
  • Debt funds: Debt / Fixed income funds are another low-risk alternative to equity, providing the benefit of interest rates with a higher capital protection than equity.
  • Real Estate: India’s real estate market is growing rapidly, and investing in property can be a profitable option for NRIs. However, real estate is generally an illiquid investment and should be invested in with good due-diligence.

Conclusion

Investing in India can be a smart move for NRIs. The country’s growing economy, young and educated workforce, and business-friendly policies make it an attractive investment destination.

With the right approach and curation, investing in India can be a lucrative and rewarding experience for NRIs.

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