Why India is the right place to invest for NRI’s and Residents

With India’s economy experiencing a paradigm shift that clocks in robust growth year after year, Indian and foreign investors on the lookout for capital gains consider it to be one of the best growth stories in the world. 

A stable annual growth rate, booming capital markets and rising foreign exchange reserves make for attractive market opportunities with promises too tempting to ignore.

Government policies over the last decade have significantly strengthened India’s economic standing, and this has played a large part in making it one of the strongest global economies. Additionally, the country is a hot-bed for start-ups in the fields of e-commerce and technology, alongside Japan, China and Hong Kong.

Why choose India

Since the introduction of Digital India, the country has embraced all forms of digitalization, thus exhibiting its adaptability to change.

Even when it comes to monetary transactions ‘an area Indians had been, until recently, conservative’ the thrust that came from demonetization nudged Indians to adopt digital modes of payment too. Local tech start-ups have pushed the boundaries of innovation as well, encouraging investors across the globe.

Additionally, initiatives such as Skills India and Make in India have made a significant impact in making the country an attractive investment arena. Make in India, specifically focuses on domestically made products, not just ‘for India,’ but ‘for the world.’

A little caution

On the flipside, it is worth mentioning that India has serious risks and issues to tackle compared to other emerging economies

India’s middle class is growing and so is their consumption, yet, there is massive inequality that leaves millions of people at the bottom of the strata. 

Government policies often hinder opportunities that are well within reach, and the lack of good infrastructure creates a huge bottleneck when it comes to growth. The lack of sanitation, crowded roads, weak transport network and no real fixes in sight provides a hindrance to ready investors. 

There are more problems to consider, but while reforms remain in the planning phase, on the economic front, it is business as usual, with consistent efforts to maximize productivity gains and return on foreign as well as domestic investments. The recent implementation of GST helps to remove trade barriers and assist in growth, much like the efforts to address older bad debts and non performing loans.

Welcome, world

The Government of India is taking several steps to minimize discrimination against foreign investors.

From reducing capital gains rate with a view to liberalize the Indian market, the government has amended the exchange control regulations previously applied to businesses with large foreign participation. 

The lifting of the ban against using foreign trademarks or brand names, the lowering of the corporate tax rate for foreign firms and the exemption of both, Indian and foreign firms from export earnings are just a few of them. Additionally, the RBI now allows 100% of foreign investment for infrastructure such as roads and bridges. 

The fall in the prices of crude oil from is another attractive reason why investors are attracted to India. The fall aids in strengthening the rupee, thereby allowing for significant savings on import and setting India up in terms of financial stability. 

In terms of inflation, the RBI has forecasted a downfall in comparison to its previous estimate and have adopted several measures to keep inflation in check, such as control over import-export along with food subsidies and low commodity prices. All this translates to the stock market performing well which ensures that investments will be on the rise.

Future focus

One of the key events that took place in India this year, the General Elections did see a volatile first half of the year.

However, as the new government focuses on fiscal stimulation, attention will once again be paid to the economy, leading to positive outcomes for investors. 

Coming to real estate, numerous policies in 2018 have shaped this industry this year, guaranteeing transparency and quality of construction to investors and buyers alike. One of the biggest real estate trends showed a global increase in investments by foreign investors, thus improving India’s credibility and making it an attractive destination for FDIs, thanks to a solid regulatory framework. 

Contributing to the real estate boom is the ever increasing demand for homes, coupled with new RERA laws compelling builders to revamp their business models to assure a mandatory date of completion of projects. The accountability and transparency demanded by these laws ensure that Indian real estate industry promises a higher, sustainable demand. 

With all these as contributing factors to India projecting the best GDP growth trajectory of all major economies in the coming years, it builds a strong case for investing in India and it is highly likely that the country will offer investors a strong foothold as they choose from their investment options.