Investment in India

Wealth Management Investment Guide for NRIs

What would you prefer: Rs 1, 00,000 right now or Rs 1, 00,000 five years from now?

It will be better if we should take Rs 1, 00,000 today because we know that there is a certain time value of money. The Rs 1, 00,000 received now will provide us with an opportunity to put it to work instantly and earn a certain return on it.

A single rupee today is worth more than a single rupee a few years down the line. Because of this, people who have surplus funds in the form of savings want to invest so that the value of the funds over the years does not go down.

It is also very important to determine your financial goals. You need to decide which type of investment strategies works for you. Your strategy will determine the extent of your success in the investment world whether you invest in India or overseas markets.

The strategies can differ greatly from a rapid growth strategy where an investor focuses on capital appreciation to a safety strategy where the focus is on wealth protection. The most important part of investment strategies is that it aligns with the individual's goals and is closely followed by the investor.

Investment options in India

There are various forms of investments options at the disposal of individuals in India. These include real assets like a house, a car, a television, or financial assets like stocks in companies, bonds, units of funds, etc.

Traditionally, term deposits in banks, post office savings schemes, bonds and common stocks are the most accessible forms of investments available to the investors. Term deposits, post office savings schemes and bonds give a fixed return over a period of time.

Several national priority level and state-specific projects are being implemented across the country by the Government of India. These offer huge potential for investors willing to invest 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.

Wealth management services in India

There are individual investment avenues in India that help you enhance your individual wealth. These are offered by eminent banks in India, which have rich experience in servicing overseas Indians. Not only will you get to choose from a wide bouquet of investment products, but these can also be customised as per your individual needs.

Investment Toolkit

In an effort to ease the process of investing into the country, Overseas Indian Facilitation Centre (OIFC) has developed an online ‘NRI Investment Guide'.

The toolkit provides an entire range of investment guidelines, policies and procedures, suggests the range of compliance requirements and clearances, as desired, in synergy with the investor’s investment preferences. In other words, it is a simple, practical, and realistic online investment guide customised to the needs of overseas Indian investors.

Investment Facilitation Platform of OIFC helps NRI through the complete process of investing, right from choosing the correct investment opportunities and applying right investment strategies to actually making the investment.

How and Where to Invest in India?

If you're thinking about investing in India to make money especially in real estate, you need to first determine your financial goals. Do you need to make money quickly, invest for your children’s college fund, or build wealth for your retirement? Once you determine your financial goals, you need to decide which type of investment strategy works for you.

The proof of an investment strategy is how it performs in bad times, not in good times! Strategy is the key, whether you are planning a war, an election campaign or buying a property. There is no such thing as a generic, one-size-fits-all strategy. It is a statement, not an essay. Not having one, is like driving a car through the woods at night without any lights on. Planning your investments in a way that suits your strategy can enable you to create and maintain a competitive advantage.

Choosing the right investment strategies is all about matching the right real estate problem with the right investment solution. Your choice of which strategy to implement depends on two factors:

• The profit outcome you want to achieve (i.e. capital gains and/or positive cash flow returns); and
• The needs of the person who'll be paying you money in exchange for the use of the property.

Your strategy will determine the extent of your success in the property investment world whether you invest in India or overseas markets. It is a crucial first step for the novice property investor and something that an experienced investor monitors and reviews in light of its performance. Strategy dictates the Why, When, Where and How of property investment.

Business Investment Opportunities in India for NRIs

In today’s global economy more and more companies are looking behind their countries borders for investment opportunities. These opportunities can be mergers and acquisitions, joint ventures or Greenfield investments. India is gaining more and more respect as a country to invest in, while it has some major advantages.

India is the second-most profitable destination, according to UNCTAD's World Investment Prospects Survey 2010-2012.

Long-term projects call for large investments, other options include individual investment avenues and products.

National priority level and state-specific projects are being implemented across the country. These offer huge potential for investors willing to invest 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 business investment opportunities for Non-Resident Indians (NRIs)/Person of Indian Origin (PIOs) to invest in India because of the rise in disposable income, penetration of health insurance and unhealthy lifestyle of present generation.

The returns from real estate sector in India have consistently performed well and have even outperformed other investment options. The Government of India has created many policies and schemes to maximize business investment opportunities for NRIs/PIOs looking to invest in Indian real estate sector.

Government’s intervention on policy issues, especially, Tax Regulations and foreign direct investment (FDI) in sectors like retail, aviation etc. will play a role in driving large transactions, especially inbound deals.

Investment Trends in India

India has grown as one of the significant economies in the world having immense potential for long-term growth. Indian economy is developing at a faster pace and is brimming with investment opportunities. As per McKinsey Global Institute, the average Indian’s income will triple by 2025. This will result in more investment in the coming years.

India: Investment Potential

According to UNCTAD’s World Investment Prospects Survey 2010-2012, India is the second-most profitable destination for foreign direct investment (FDI) in the world. Indian markets have significant potential offering prospects of high profitability and a favorable regulatory regime for investors.

Investment for saving purpose in future is certainly a good idea. There are large numbers of companies that offer plenty of opportunities for different individuals. India with a matured capital market, backed by liberal policies and strong banking system has turned to a profitable business ambience both for domestic and international businessmen.

Entry strategies for global investors in India

The various entry strategies for foreign investors in India have helped to bring in huge amounts of FDI into India. Some of the investment strategies initiated by Indian government are:

• A foreign company can start its operations in the country by setting up a new company according to the Companies Act 1956. The foreign direct investment of 100 per cent has been allowed by the Government of India in such companies.
• An international company can start its operations in India by forming joint collaboration with an Indian company.
• An international company can start its operations in India by setting up their branch office, representative office, and project office.
• A foreign company can start its operations in India by establishing a wholly owned subsidiary in the sectors, where foreign direct investment up to 100 per cent is permitted under the FDI policy.

Areas of Investment

The scope for business in India is enormous and has led to more investment options in India. Some key areas like infrastructure, petrochemicals, power, automobile, electronic hardware, etc. are receiving attention not only for foreign but for domestic ventures also.

Further, there are various exciting opportunities for conducting business in India, especially, for entrepreneurs dealing in outsourcing technology, internet ventures, software development, e-commerce, etc. People can also find a niche market in India where they can sell various products like health care products.

Major initiatives in India

There are various initiatives taken in India that provide a liberal and investor friendly environment:

• Simplified investment procedures
• Liberalised trade policy and exchange regulations
• Intellectual property rights
• Enactment of competition law
• Financial sector reforms

There is no dearth of investment options in India after the investment under the automatic route has been allowed by the Government. The Government has also revised its policy regarding FDI in Indian companies engaged in retail trade. Foreign investors will now be permitted, subject to certain conditions, to own up to 100 per cent of single-brand retail trading companies in India.