Opportunities and off Shoring

Indian economy has given a feel good factor to the NRIs, especially
in the real estate sector. Many avenues are being created as well
as schemes being fashioned for them to maximize investments from
abroad.

All persons residing outside India holding Indian passports
and also people of Indian origin have been granted permission
by the Reserve Bank of India (RBI) to invest in both residential
and commercial properties in India. Markets have stabilized and
there is an impressive amount of interest in this segment. NRIs
are quick to invest in properties in India where they see an opportunity
for a good deal.

On the anvil is a single-window investment promotion council planned
by the government, which will undertake investment promotional
activity. This will involve making extensive contacts with potential
investors, lobbying and interacting with individual companies
so that the overseas Indian finds a suitable investment environment.

To an NRI, a base in the homeland also brings with it a sense
of security. The number of NRIs who are investing in property
for sentimental reasons and for better investment returns is quickly
multiplying.

The government including RBI and Foreign Exchange Management Act
(FEMA) has liberalized the rules and regulations for the NRIs
to make investment in real estate. Liberalization along with the
added advantage of repatriation of the capital invested and even
the rental proceeds under the circumstances prescribed by RBI
have also encouraged NRI investments in real estate. Capital gains
can be taken back after paying capital gains tax. Apart from India
being a safe destination, 10 to 12 per cent returns on the investments
are assured.

As opposed to earlier times when an NRI had to struggle with Municipal
rules, income tax and wealth tax issues, succession legislations
for all religions, the Hindu joint family Act, land ceilings and
others, these are times that have NRIs being welcomed with a red
carpet. The flexibility in rules has elicited an extraordinary
response from the NRI community.

The NRI investor can raise finances from financial institutions
to purchase an apartment. The Housing Development and Finance
Corporation (HDFC) and other financial institutions in India are
facilitating the NRI investment in property speedily and efficiently.
Though the rates of property tax are slightly different from what
Indian residents pay, the NRI also enjoys the same status as any
other property owner. NRIs pay property tax to the concerned authorities.

NRIs are considered the safer bet eligible for availing a home
loan in India facility to purchase a property in India as they
are prompt on repayment. The repayment of the home loan can be
made through a normal banking channel by way of inward remittance.
For those who earn an income in India through rent, dividends,
pension, etc the loan can be repaid by way of direct debit into
the accounts of Non-residents (External) [NRE] or Non-resident
Indians. The existing balances in the Non-Resident (Non-Repatriable)
rupee accounts have been allowed to be credited on maturity to
convertible NRE account. This has boosted the real estate business.

The rules relating to investment and repatriation have been liberalized
to the advantage of the NRIs. Foreign exchange dealers have been
suitably empowered to deal with the matter of remittances. NRIs
are free to repatriate in foreign currency their current earnings
in India such as rent, dividend, pension, interest and the like
based on appropriate certification. Online banking in India and
these accounts for NRIs have made life much easier for transactions
involved in NRI investment in India.

What has also made NRIs flock to India has been the initiative
by builders and real estate dealers to ensure transparency about
the projects on offer and fairness in dealings. NRIs consider
their investments to be safe and rewarding when they park their
money in real estate India.

Many developers in Mumbai, Gurgaon, Pune, Delhi, Gujarat and Kerala
have decided to plan expensive projects. The vast majority of
NRIs is spread across the globe is one of the prime reasons that
a large number of builders and developers are making painstaking
efforts to woo the non-resident Indian. The Indian real estate
developers are leaving no stone unturned in tapping the overseas
markets. High-quality construction in India is attracting huge
NRI investment in real estate. The surge in demand came as soon
as the investment laws were revised to aid NRIs in moving their
investments freely in and out of the country.

Group housing for NRIs is also being contemplated. The general
pattern in investment shows that NRIs are investing in residential
property in the above average and high segment.

NRIs are welcome to participate in real estate investments by
way of huge investments in the construction of residential and
commercial projects, SEZs and infrastructural facilities The pan
Indian interest in property buying has spawned a new league of
businessmen who pitch in for tracking and tracing of property
and offer customized investor services to NRIs. Gulf NRIs have
been buying property in India over the years to have a good real
estate portfolio back home.