India’s economy is amongst the largest in the world on the basis of Purchasing Power Parity. It is today one of the most attractive destinations for business and investment opportunities with the available large manpower base, diversified natural resources and strong macroeconomic fundamentals. In FY 2011-12, the country attracted foreign direct investment (FDI) of around US$ 46.8 billion in various sectors.
The economy of India also boasts a robust financial system and deep capital markets. India’s demographic are very attractive with approximately 65 per cent of the total population falling in the age group of 15 to 64 years. A comparatively stable Government, an open democratic set-up, and a strong and reliable judiciary system, add further advantage to the Indian Economy. The country’s strong fundamentals such as a growing middle class population, cost competitiveness and strong domestic consumption have made it a preferred destination for MNCs from across the world.
Government’s intervention on policy issues, especially, tax regulations and foreign direct investment (FDI) will play an important role in driving large transactions, especially, inbound deals. India’s growth story remains intact and NRIs/PIOs will continue investing in India.
Investment Options for NRIs in India
A stable, prosperous foundation is the primary requirement to grow one’s business in India. India offers such foundation. It provides rich business opportunities and markets to non-resident Indians (NRIs) and person of Indian origin (PIOs) for new products and services. It is one of the fastest, easiest and lucrative investment destinations in the world to set up business. India is the second-most profitable destination, according to UNCTAD’s World Investment Prospects Survey 2010-2012.
NRIs/PIOs are investing in India, especially in the health care sector. The sector has opened up new business opportunities for them to invest in India because of the rise in disposable income, penetration of health insurance and change in lifestyle of present generation.
How can NRIs and PIOs invest in India?
The following investment opportunities are available to the NRIs and PIOs for investments in India:
- Non-Resident (External) Rupee (NRE) Accounts: NRE account may be in the form of savings, current, recurring or fixed deposit accounts. Such accounts can be opened only by the non-resident himself and not through the holder of the power of attorney. The interest rates on NRE Savings deposits shall be at the rate applicable to domestic savings deposits. Currently the interest rate is 3.5 per cent
- Non-Resident Ordinary (NRO) Rupee Account: NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts. Account should be denominated in Indian Rupees. Permissible credits to NRO account are transfers from rupee accounts of non-resident banks
- Foreign Currency Non Resident (Bank) Account – FCNR (B) Account: FCNR (B) accounts are only in the form of term deposits of 1 to 5 years. All debits / credits permissible in respect of NRE accounts, including credit of sale proceeds of FDI investments, are permissible in FCNR (B) accounts also. Account can be in any freely convertible currency
- The Government has created many policies and schemes to maximize investment options for NRIs/PIOs in the real estate sector of India
- RBI has allowed, both people residing outside India holding Indian passports and also PIO to invest in residential as well as commercial properties in India
- RBI has granted general permission to NRIs/PIOs, for undertaking direct investments in Indian companies, under the automatic route purchase of shares
There are many other exciting options for doing business in India, especially, for entrepreneurs dealing in outsourcing technology, internet ventures, software development, e-commerce, etc.