In recent years, Indian economy has grown multifold and continues to be one of the fastest-growing major economies in the world. Owing to several structural policy reforms taken by the Government, India is estimated to become one of the top three global economies over the next 10 to 15 years.
India projects a potential growth of around 6-7% annually over the next decade that can further grow through increased investment participation.
This exhibits a golden opportunity for Non-Resident Indians (NRIs) to invest in the market. In order to gain insights into the perceptions of NRIs regarding India as an investment destination and to understand the challenges they currently face.
SBNRI, India’s First NRI-focused FinTech platform conducted a comprehensive survey encompassing NRIs from various countries, such as the United States, Singapore, the United Kingdom, Australia, and others.
According to the SBNRI survey, nearly 53% of Singapore-based NRIs who participated in the survey said India offers a better return on investment in comparison with other countries they have invested in. The survey highlights a similar trend among the NRIs residing in the United Kingdom, the United States and Australia.
Commenting on India’s investment scenario, SBNRI team said, “India’s economic performance and global position signifies great investment opportunities for NRIs. Its rapid growth across multiple sectors has created a center of stability with reduced market volatility. This holds immense opportunity for NRIs in terms of investment returns.”
India has been witnessing an optimistic inflow of NRI investments due to a myriad of investment options available in the country. Though there are several investment alternatives such as mutual funds, stocks, IPOs, bonds, real estate, etc., NRIs have to deal with certain regulatory challenges to put their money into high ROI opportunities.
According to SBNRI’s recent survey, nearly 46% of Australia-based NRIs followed by NRIs in Singapore and the UK find difficulty in obtaining necessary approvals or licenses. Additionally, more than 35% of UK-based and NRIs from other countries who participated in the survey said they face extreme difficulty in repatriating funds while 35% of Singapore-based NRIs face challenges to invest in India due to restrictions on foreign investment in certain sectors.
Besides regulatory risks, investing in India also carries currency risks and has a certain impact on the returns. To mitigate the layers of investment risk, around 30% of NRIs based in the United Kingdom invest in Indian stocks or funds denominated in the investor’s home currency.
Furthermore, 27% of them hedge through forward contracts or currency options and others diversify across multiple currencies as an apt way to manage currency risks.
“Indian economy is fattening its foreign exchange reserves to ensure its economic stability. As the RBIs statement, the country’s inward gross remittances have touched an all-time high in FY2022 at $107.5 Bn, surpassing the World Bank’s projection by $7.5 Bn. This demonstrates India’s potential to generate higher returns on foreign investments,” he added.
In line with this backdrop, SBNRI’s survey report also highlights that 35% of each Singapore and UK-based NRIs prefer to invest their hard-earned money in India while 65% US based NRIs prefer both – investing and sending money home in India.
India is poised to become one of best investment destinations, offering NRIs higher returns on their investment. FinTech platforms, like SBNRI, are facilitating NRI contribution towards investment in India, especially in new-age asset classes.
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