Investment Opportunities in India

April 26, 2013

Scenario of real estate sector in India

The Indian real estate sector has witnessed significant growth in the past few years and is expected to grow at the rate of 30 per cent in the coming years. The sector has emerged as one of the most appealing investment sectors for domestic as well as foreign investors.

The major factors responsible for growth in the sector are increasing purchasing power, favourable demographics, existence of customer friendly banks & housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract real estate investments.

Growth prospects

The Indian real estate market size is expected to touch US$ 180 billion by 2020. In fact, the demand is expected to grow at a compound annual growth rate (CAGR) of 19 per cent between 2010 and 2014, with tier I metropolitan cities projected to account for about 40 per cent of this.

Investment opportunities

At present, investment trends in India are showing a huge number of NRIs investing in Indian real estate sector.

India needs to invest US$ 1.2 trillion over the next 20 years to modernise urban infrastructure and keep pace with the growing urbanisation, as per a report released by McKinsey Global Institute (MGI)-India’s urban awakening.

Growing infrastructure requirements from sectors such as education, healthcare and tourism are providing numerous opportunities in the sector. Further, India is going to produce an estimated two million new graduates from various Indian universities during the year, creating demand for 100 million square feet of office and industrial space. In addition, presence of a large number of Fortune 500 and other reputed companies will attract more companies to initiate their operational base in India, thus creating more demand for corporate space.

FDI in Indian real estate

Construction development sector (including townships, housing, built-up infrastructure & construction-development projects) has attracted a cumulative foreign direct investment (FDI) worth US$ 22,007.67 million from April 2000 to February 2013, according to the Department of Industrial Policy and Promotion (DIPP).

In addition, the sector is set for robust inflows of US$ 4-5 billion from overseas investors in the next couple of years, with Bangalore, Delhi and Mumbai emerging as the favourites, as per Jones Lang LaSalle, a global real estate consultancy giant.

Government initiatives in the sector

The Government of India (GOI) has allowed FDI up to 100 per cent under the automatic route in townships, housing, built-up infrastructure and construction development projects to increase real estate investment, generate economic activity, create new employment opportunities and add to the available housing stock and built-up infrastructure.

The Reserve Bank of India (RBI) has granted permission to foreign citizens of Indian origin to purchase property in India for residential or commercial purposes. Further, the government is also committed to introducing FDI in multi brand retail, introduce changes in the existing SEZ policy to resurrect developer interest and expand the role of the private sector in infrastructure development.

Tax Advantages

People can avail huge tax benefits on investing in real estate:

  • Tax exemption is available on re-investment of sale proceeds of property in eligible possibilities
  • Tax benefit is available on interest on housing loan raised in India

December 26, 2011

Great Investment Options for NRIs for Making Great Profits

If you are an NRI, it is natural that you would like to invest in some of the best agencies, so that the future returns on it are huge. There are several investment options for NRIs currently, but OIFC proves to be the best. Special facilities are often offered to the Non-resident Indian because it is one of the best promotion agencies for investment in India, especially in Gujarat. The investment types available with this organization are many, and therefore, you can carefully and wisely select from them. However, there are some special considerations that you would have to make while making an investment here.

As there are different investment types under this sector, the choice of the type would largely depend on the amount of money that you want to invest and the amount of risk that you are willing to take. Being an NRI, you can always invest in the Indian Stock Market through mutual funds or directly through the equity market. There are Corporate Fixed Deposits, Monthly Income Plans, and even Fixed Maturity Plans. Periodic investments are also a good option in that case. However, if you are absolutely confused in making the right decision, the best thing that you can do in this context is to take the suggestion of the experts in this context.

India being a land of opportunities, you would not have dearth of investment options for NRIs. You would just have to take wise and careful steps, so that you end up making the best deals. The investment options along with this line are generally long term strategies. At different periods of time, you would be able to get different beneficial features with these investment options that can certainly work great for you. However, you can always assess the market and the risk factors involved in such forms of investments, so that after a long time the profit that you earn is visible.

In addition to that, if you want to make a real estate investment, carrying out the transaction through OIFC can be wise. It is believed that carrying out transaction can be often a cumbersome task, because there are several laws and rules in accordance with transaction of property. However, if you take a closed guidance of the OIFC rules, you would definitely be able to carry out investment safely and wisely. In addition to that, you would also have to keep in mind several foreign exchange regulations in relation to acquisitions and transfer.

When you want to make a real estate investment, you should also be aware of the fact that you would be able to invest in shares of companies that are associated with the development of township, or construction development projects. You can also acquire any immovable property within India apart from the agricultural property, farmhouses and plantation properties. If required, being an NRI, you would also be able to transfer these properties to any resident of India. You would also be able to transfer the property to another non-resident Indian, as well. Therefore, there are huge investment opportunities available here for you.

Growing Investment Opportunities in India

India is a huge capital market, and therefore, investment opportunities in India are also available. India is basically a mature capital market, and the free economy of the country is actually backed by different investment options. Therefore, while investing, a person has to consider his needs for investment and the amount that he can invest. As there are different options for investment India, he can easily determine the ideal solution in accordance with the requirements. Well, in the growing industrial sectors of the country, it is expected that there would be an increase in the growth rate to about 9.95 percent during the period of 2013-2015.

Under the Foreign Direct Investment in India, the economy of the country would be backed by structural reforms, demographic dividend and also the impact of globalization. These factors would certainly work as a great source of catalyst and consequently, showcase the other different opportunities of investment that are present in India. The high industrial growth along with increased rate of private investments is certainly the crucial factors that can create an expansion of the Indian economy. This in turn, might result in bigger opportunities of investment.

In fact, this fact certainly cannot be denied that the investment opportunities in the country have mainly resulted in the growth of different industrial sectors. In short, it can largely be said that growth and investment are interrelated and only with a growth in different sectors there has been a growth in the investment sectors. This is certainly a great opportunities for the investors in India to find out new levels of investment. In fact, it was also claimed by the planning commission of India that the opportunities of investment, especially in the sector of infrastructure would be very much close to the US target of more than $500 billion.

By 2012, investment India, especially in the field of medical tourism can largely witness a growth. This is again the resultant impact of the growth of the economy. From three years in a row, there has been a growth in the Indian economy by almost about 9 percent, and greater growth is always a sign of greater opportunities for investment. Apart from Indian investors, there are also scopes of investment for the overseas investors, especially in relation to the Foreign Trade Policy. This is the reason for which various export policy measures are being adapted, so that different labor intensive segments can be covered within these, and this in turn, can pave the way for bigger investment.

The policy of Foreign Direct Investment in India is constantly being reviewed, and liberalization measures are also being taken. Changes in different equity caps are also being taken into consideration, and the policy announcements are also being frequently taken into consideration. With regards to all these, it can largely be concluded that irrespective of the ups and downs of the economy, if the policies are constantly being reviewed, it would definitely prove to be a boon for the different investors in India and abroad. This in turn, would surely create a great and a positive impact on the economy, as a whole.

August 29, 2011

Invest in real estate to reap lucrative returns

Real estate is booming now and booming high! Real estate investments have become really advantageous as well as appealing and have taken the driver’s seat in the race of lucrative returns. Considering the situation of today one can emphatically state that investment in infrastructurehas more and better profitable returns than any other business. But again as this too is affected by the external forces, especially the markets, one cannot neglect the risk, it too has inherent.

  • Less risky: The risk involved in this type on investment is less when compared to that of any other types of investments. Real estate investment has always brought in much more gains if it is taken and considered in the right spirit as it should be with the right amount of sagacity and seriousness. Few of the socio- economic factors like place and position, behavior of market, density of population, history of land etc, are responsible for making this endeavor a less risky one.
  • Heavy starting capital is not required: With the wide array of loans available nowadays, buying an new property or land has become all the more easier. Housing loans, which have come up nowadays are great means for even a middle class man to start making real estate investments.
  • Sharpen your investment skills: Buy a plot of land and you would feel what it means when you own a piece of land brought with your hard earned money. Gradually by buying and selling property you would learn what investment is all about and what are the few intricate details which are essential when you invest your hear earned money into anything.
  • Real estate is never a time consuming investment technique: This never drains out all your savings stock or your energy at one shot. Timing is the important keyword which is essential, and would gradually grown within you once you slowly take this up as a part time then a full time investment option.
  • Land value appreciation: Inflation is something which has become the part and parcel of one’s life, but what has been generally noted is that, the appreciation values of land is much more than even inflation! So no doubt real estate it is a lucrative option.
  • Availability of tax exemptions: An individual avails a lot of tax exemptions on his investment –income-property. The tax exemptions which are obtained through the real estate investments are much more when compared to any other type of investment. With the other investments, you tend to lose on various types of investments at your bank due to inflation and the huge taxes which could be imposed, but this never happens with the real estate.
  • The increasing demand of land: Earth has two thirds water and one third land, and with such rise in population, it is obvious that scarcity of land would increase as days would go by. Thus with the increase in population, the availability of useable land decreases, creating increasing demand for it. Thus, as per the demand supply theorem, the price value of the commodity would mount due to this excess demand.

So folks think of real estate investment seriously if you have some extra bucks lying in your bank!

May 19, 2011

Huge NRI Investment in real estate sector in India

The Indian real estate sector has been seeing huge investment from non resident Indians (NRIs) and Overseas Citizens of India (OCIs) who have now started applying online and checking out top ranking brokers to buy homes and properties across India. Real estate organizers are building properties comparable to the rest of the world to cater to the growing demand from overseas Indians. Most of these are premium properties with amenities not seen anywhere else.

Many real estate companies in India are multinationals, and, therefore, are capable of producing replicas of integrated properties found in countries such as the US and UK. Their target clientele are the NRIs and everything is created with their requirement in mind.

Participation of foreign banks
NRI investment in real estate has become more lucrative with major foreign banks in India and financial institutions funding real estate in India. Rise in demand for quality properties for housing and the upswing in the hospitality and hotel industry in India have brought a number of such institutions in direct competition to invest in the real estate sector. There is also a boom in the stock prices of real estate companies.

The Indian Government has relaxed many rules and regulations regarding NRI investment in real estate to attract more investment from this sector. It is also pumping in more money in the real estate sector in India. The government has also updated the property tax act, the rent control system and the land ceiling regulations and made them more investor friendly for NRIs wanting to invest in real estate. There is further liberalization of foreign exchange regulations to get more NRIs into real estate buying, selling and investing.

Government measures
Among the many progressive measures taken by the government to promote demand and investment in the real estate sector are allowing 100% FDI in townships, housing, built-up infrastructure and construction development projects through the automatic route, subject to guidelines as prescribed by DIPP.

It has also allowed 100 per cent FDI under the automatic route in development of Special Economic Zones (SEZ), subject to the provisions of Special Economic Zones Act 2005 and the SEZ Policy of the Department of Commerce.

Returns have also skyrocketed for private equity players who have found an excellent business opportunity in real estate over the last few years. For NRIs it is profitable to invest in real estate and see property prices appreciating over the next two or three years.

According to the data released by the Department of Industrial Policy and Promotion (DIPP), housing and The real estate sector attracted a cumulative foreign direct investment (FDI) worth US$ 9,405 million from April 2000 to January 2011 Compared to US$ 1,048 million during April-January 2010-11. This includes construction of cineplex, multiplex, integrated townships and commercial complexes etc.

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