The Emerging Giant: Investing in India’s Thriving Economy

Introduction

India is one of the fastest-growing economies in the world, and as a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI), you have a unique opportunity to invest in this dynamic market. In this article, we’ll discuss why investing in India can be a smart move for NRIs and the investment opportunities available to them.

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Why invest in India?

India has a vibrant economy with a young and growing population, a booming tech industry, and a thriving consumer market. The country’s GDP is expected to grow by around 30% by 2025, making it one of the fastest-growing economies in the world. This growth is being driven by various factors, including government reforms, foreign investment, and a growing middle class.

Some stats on the same:

• Median age of Indian population is ~28 years, vs ~38 years for US and China
• Urban unemployment rate has reduced from ~9% to ~7% in the last two years
• Indian consumption is slated to more than double by 2031, as 87% of households cross the $5000 income, vs only 62% currently.
• Along with consumption, India’s share of manufacturing and exports are also poised to grow significantly
• With India’s labor advantage vs the developed world, global spend on outsourcing in India is estimated to grow from $180B to $500B by 2030

Investing in India can be a smart move for NRIs for several reasons -

First, investing in India can provide diversification to an NRI’s investment portfolio to growth, while most of the portfolio stays in value investments in your home country.

Second, NRIs have a good understanding of the Indian economy and culture, which gives them a competitive advantage when investing in the country.

Third, the Indian government has introduced various measures to attract foreign investment, such as liberalizing foreign investment policies and offering tax incentives.

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Types of Investments

There are several types of investment options available to NRIs in India. Here are a few:

• Equity: Investing in Indian stocks can be a lucrative option for NRIs. India’s stock market is the third-largest in Asia and has outperformed many other markets in recent years.
• Mutual Funds: Mutual funds are a popular investment option in India. NRIs can invest passively in mutual funds, reaping the benefits of growth without the hassle and risks of active stock-picking.
• Fixed Deposits: Fixed deposits are a safe and low-risk investment option in India. You can earn interest on your deposit, and the rate of interest is 75% higher (7% vs 4%) than that offered by banks in the US.
• Debt funds: Debt / Fixed income funds are another low-risk alternative to equity, providing the benefit of interest rates with a higher capital protection than equity.
• Real Estate: India’s real estate market is growing rapidly, and investing in property can be a profitable option for NRIs. However, real estate is generally an illiquid investment and should be invested in with good due-diligence.

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Conclusion

Investing in India can be a smart move for NRIs. The country’s growing economy, young and educated workforce, and business-friendly policies make it an attractive investment destination.

With the right approach and curation, investing in India can be a lucrative and rewarding experience for NRIs.

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