A stable, prosperous foundation is the primary requirement to grow oneís business in India. India offers such a foundation. It provides rich business opportunities and markets to non-resident Indians (NRIs) and persons of Indian origins (PIO) 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.
To attract foreign investment in India, the Government has offered several facilities to the NRIs, PIO and overseas corporate bodies (OCBs).
Investment options for NRIs in India
National priority level and state-specific projects are being implemented across the country. These projects offer huge investment opportunities in India. The government is in fact, promoting Public Private Partnerships (PPPs) in many projects opening up new vistas in sectors such as infrastructure, education, healthcare etc.
The health care sector of India has also opened new investment opportunities for NRIs investing in India because of the rise in disposable income, penetration of health insurance and rising health related lifestyle challenges across demographics.
The returns from the real estate sector in India have consistently been high and have even outperformed other investment options. The Government of India has created many policies and schemes to maximize investment options for NRIs/PIOs looking to invest in Indian real estate sector.
Some of the most popular investment opportunities available to the NRIs and PIOs for investments in India are:
- 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.
- 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.
- Bank Fixed Deposits: Bank failures are rare in India so bank fixed deposits are a very safe way to invest for NRIs investing in India. You know the rates up front so there is no uncertainty there. Taxes can eat into your returns though, especially if you are in the high tax bracket, but even then a fixed deposit (FD) that compounds quarterly and is done for a long maturity will yield well.
- Foreign Currency Non Resident (Bank) Account ñ 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.
- Senior Citizens Savings Scheme (SCSS): It is a new investment opportunity in India for Senior Citizen. The account may be opened by an individual, who has attained age of 60 years or above on the date of opening of the account.
- National Savings Certificates (NSC) IX Issue: This is another safe investment with decent returns. There is no maximum limit for investment and no tax deduction at source (TDS). Certificates can be kept as collateral security to get loan from banks.