NRI Investment in Real Estate is Increasing in India

February 4, 2023
NRI investment

Investments in Indian Real Estate by Non-Resident Indians (NRIs) has seen an up tick. 

As the Indian economy is developing rapidly, and governments are also actively involved in infrastructure development, investors are looking not to miss any chance of making good gains. Simultaneously, NRIs have also seen the potential of today’s Indian real estate market.

“NRIs are among the wealthiest outside India. We need to make it easy for them to invest back home”

The government and the Reserve Bank of India (RBI) have made it easier for NRIs to purchase commercial properties in India through streamlined procedures and regulations, such as the Foreign Exchange Management Act and various tax exemptions and concessions.

Reasons for NRI Investment in Indian Real Estate

  • The real estate industry in India is recovering from the pandemic. NRIs invested USD 13.1 billion in Indian real estate in 2021, and it’s expected to grow by 12% in 2022
  •  Commercial real estate is considered safer and more profitable than other options.
  • Office spaces, schools, and student housing are the most popular commercial real estate investments for NRIs.
  • NRIs invest more money than other investors, with an average investment of INR 38 lakhs.
  • The Indian government’s focus on affordable housing and smart cities has increased the number of new projects in these segments, providing more investment opportunities for NRIs
  • India’s demographic dividend with a large young population, increasing disposable incomes and the growing demand for housing make it an attractive market for investors.

NRIs Government Regulations and Industry Transformation

The Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST) have greatly improved the ease in the Indian real estate sector. These regulatory bodies have introduced increased transparency, professionalism, and standardization in the industry, making the process much smoother for Non-Resident Indians (NRIs) who wish to invest in the Indian real estate market.

The Foreign Exchange Management Act (FEMA) also allows NRIs to purchase commercial properties in India, further increasing their investment opportunities. Additionally, the various free trade agreements and increasing international trade and investment opportunities have contributed to the growing interest of NRIs in the Indian real estate market.

The Indian government has also implemented several liberalized policies towards foreign investment in the real estate sector, These policies include relaxations in the Foreign Direct Investment (FDI) regulations.

Furthermore, the Indian real estate market has seen an increase in developing NRI-specific projects, such as NRI townships and NRI housing societies. These projects cater to the needs and preferences of NRIs and offer a range of amenities such as lake-view homes, clubhouses, play zones, and swimming pools. 

Trend of NRI investment in Indian commercial real estate is expected to continue, providing an opportunity for the Indian real estate sector to grow and flourish, With more NRIs investing in commercial real estate. It is time for the Indian real estate sector to take its place on the global stage and attract more investments worldwide.

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