Mumbai: A stint or two abroad is a common thing for most professionals these days. No wonder, financial advisors have to deal with many Indians with non-resident tag these days. According to them, most non-residents are keen to keep their Indian ties intact and invest in various avenues like mutual funds (MFs), fixed deposits, real estate and so on. “Most of these people look to return to India finally. That is one of the reasons why they are keen to invest
here,’’ says Suresh Sadagopan, chief financial planner, Ladder7 Financial advisories.
Besides emotional reasons it also makes perfect sense as India is one of world’s fastest growing economies and they can hope to pocket superior returns here. “The chances of getting double digit returns abroad is limited. In India, you can always hope to get 8-10% returns,’’ says a wealth manager with a bank. “For example, Indian stock market has given even 100% returns till a few years ago, something one can never dream of in a developed country. Even fixed income investments will offer you around 8-10%, whereas getting even 3-4% from such instruments is considered great abroad,’’ he said.
But what are the investment avenues the NRI lot flocks to? Many a financial consultant maintains that property is a big attraction for them. “Most of the queries I get are related to property,’’ says an investment consultant who doesn’t want to be named. “Some people want to buy a home because they want to return to India eventually. Others look at property as pure investment. In fact, NRIs were a major force behind the real estate boom that went bust recently,’’ he adds.
Sadagopan says some NRIs are also keen on MFs as they are permitted to invest in the entire universe of schemes. “It is not true that everyone wants to invest only in property. Some are also keen to invest in mutual fund schemes, as they know there is a possibility of superior returns,’’ he says. “Also, there are no restrictions on where they can invest. OIC and PIO enjoy all privileges like ordinary Indians.
They can invest anywhere they like,’’ he adds.
However, financial advisors caution NRIs that they have to be careful while listing the details at the time of investment. They should clearly mention their status, complete with relevant documents and details. Suresh Sadagopan offers an example of investing in MFs: “They should clearly mention in the application form that they are NRIs. They should also provide their overseas address.’’ He also adds that in the case of fixed deposits, they should know the difference between various deposits like NRE account and NRO account. This is crucial because you can repatriate the income under NRO, while you can’t do the same in NRE account.
The issue of relevant papers and documents is something that creeps up regularly in conversations with financial experts. They all insist that having relevant documents is a key factor. “Some investments may require the investor’s status card abroad. If they are going for insurance cover, the company may ask for details like work permit in some cases. It can vary from company to company,’’ says Sadagopan. Desi Dreams
Most NRIs would like to maintain ties with India
Many of them want to invest in properties here as they hope to return to India one day
NRIs also consider realty in terms of pure investment
NRIs are free to invest in the entire universe of MF schemes
It makes sense to invest in India due to better returns
