For NRIs living in Australia, investing in their home country can be a smart financial move. India offers a range of NRI investment options, from stocks and bonds to real estate and mutual funds. In this blog, we will explore 5 investment options in India for NRIs from Australia. Whether you are a seasoned investor or just starting out, this blog will help you make informed decisions about your investments in India.
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Investment Options in India for NRIs from Australia
Given below are the top 5 investment options in India for NRIs from Australia:
1. NRI Mutual Funds
What is an NRI Mutual Fund?
NRI Mutual funds are investment vehicles that pool money from a large number of investors and invest that money in a diversified portfolio of stocks, bonds, money market instruments, and other securities. The pooled money is managed by professional fund managers. They invest the money on behalf of the investors in accordance with the investment objectives of the mutual fund.
Benefits of NRI Mutual Fund Investment
NRIs in the Australia may consider investing in mutual funds in India for several reasons:
- Mutual funds provide NRIs with a diversified portfolio of investments across various asset classes, including equity, debt, and money market instruments. This helps spread the investment risk across different securities, reducing the impact of volatility on the overall investment portfolio.
- Mutual funds are managed by professional fund managers who have the expertise to select and manage securities in the portfolio. This allows NRIs to benefit from the experience of investment professionals who analyze the markets and make informed investment decisions.
- NRIs can easily invest in mutual funds in India through online investment platforms or with the help of financial advisors. This makes it easy for them to manage their investments from anywhere in the world.
- NRIs investing in mutual funds in India can avail of tax benefits under the DTAA (Double Taxation Avoidance Agreement) between India and Australia. This can help NRIs reduce their tax liability in one of the countries.
- There are multiple mutual funds for NRIs in Australia to invest in India. They can choose to invest in any of them depending on their investment goals and risk tolerance.
- Mutual funds are a good long-term investment option, and can provide NRIs with the opportunity to grow their wealth over time.
Investment Procedure to Invest in Mutual Funds in India
Australia based NRIs can invest in mutual funds by opening an NRO account, NRE account, or a FCNR account with an Indian bank. They can invest by any of methods given below:
a. Direct Method
When submitting your mutual fund application, NRIs must ensure that it includes the necessary KYC details and documents. The fund house may also require an in-person verification, which can be done by visiting the Indian Embassy in your country of residence.
b. Power of Attorney
A commonly used alternative is to delegate investment responsibility to a third party. By appointing a Power of Attorney (PoA) holder, who is authorized to make investment decisions on your behalf, you can invest in mutual funds through them. However, it is essential that the KYC documents feature the signatures of both the NRI investor and the PoA holder if you intend to invest in mutual funds in India.
2. Managed Farmlands
What are Managed Farmlands?
Agricultural lands that are owned by individuals or organizations, but are managed and maintained by a specialized firm, are known as managed farmlands. The productivity of these land parcels varies based on factors such as the type of management, plantation, and soil quality. NRIs can invest in managed farmlands through Growpital.
Benefits of Investing through Growpital
Given below are the top reasons why NRIs should consider Growpital for agri-investment folio:
- Growpital provides attractive tax-free returns on investment to retail investors, ranging between 10-17%.
- It has a team of agricultural professionals who consider multiple underlying factors like soil paper quality, availability of water, connectivity, etc. to finalize the land for production.
- Under Growpital, NRIs can choose from a variety of farm projects.
- With Growpital agri-investments, NRIs from Australia can add diversification to their portfolio to hedge against inflation and market volatility.
Investment Procedure to Invest in Managed Farmlands in India
Given below are the steps you need to follow in order to invest in managed farmlands in India-
1. NRIs need to visit an online platform that allows investment in farmlands and create an account there. They need to complete the KYC using bank account details and PAN and Aadhaar number.
2. They then need to select a plan as per their investment goals and pick the number of units they need to buy.
3. NRIs can start by investing by adding money and signing the necessary documents.
4. The assured return i.e. interest amount will be credited to NRI’s bank account.
You can invest in managed farmland in India through SBNRI app. It has a partnership with top farmland asset management companies, including Growpital.
3. Stocks
What are Stocks?
A stock, a type of security, represents an ownership share in a company. Investors buy stocks with the expectation that their value will increase over time. By purchasing a company’s stock, an investor acquires a portion of ownership in that company. NRIs living in Australia can invest in Indian stocks through PIS (Portfolio Investment Scheme) of the RBI or repatriable basis or through Non-PIS on non-repatriable basis.
Benefits of NRI Investment in Stocks in India
Here are some of the benefits of NRI investment in stocks:
- Stocks have the potential to provide high returns over the long term, which can help Australia based NRI investors build wealth and meet their financial goals.
- Investing in a variety of stocks can help diversify an investor’s portfolio, reducing the overall risk of loss.
- The Indian stock market has delivered attractive returns over the long term. Therefore, NRIs from Australia can earn higher returns from investing in stocks as compared to traditional investment options such as fixed deposits and bonds.
- NRI investors can start investing in Indian stocks with a relatively small amount of money, making it accessible to a wider range of investors.
- The Indian stock market is regulated by the Securities and Exchange Board of India (SEBI), which provides a level of protection for investors.
Investment Procedure to Invest in Stocks in India
NRIs in Australia can invest in stocks in India through the following ways:
1. NRIs can also invest in Indian stocks through the Portfolio Investment Scheme (PIS). Under PIS, NRIs can invest in Indian equities and buy and sell shares and debentures of Indian companies on a recognized stock exchange. NRIs need to open a PIS account with a designated bank and link it to their NRE/NRO account. Opening a PIS account is possible at designated branches of all major banks in India.
2. NRIs can use a Non-PIS account to buy/sell equity shares, mutual funds and IPOs of an Indian company on non-repatriation basis. NRIs need to link their NRE/NRO bank account with the Demat account. They can then transfer funds from their NRE/NRO account to the Demat account and once the funds are transferred to the Demat account, NRIs can place orders for buying and selling stocks on Indian stock exchanges.
3. They can also invest in Indian stocks through mutual funds. There are several mutual funds in India that invest in stocks, and NRIs can invest a lump sum amount or through SIP.
4. NRI Bonds
What are NRI Bonds?
NRI bonds are government securities in the form of bonds issued by the RBI to NRIs who want to invest their money in the country.
Benefits of Investment in NRI Bonds in India
Given below are the benefits of NRI investment in bonds –
- There are different types of bonds like Non-Convertible Debentures (NCDs), Public Sector Unit (PSU) and Capital Bonds, Government Tax-free NRI Bonds, etc that NRIs can consider investing in.
- Investing in government securities is very convenient for NRIs in terms of tenure periods as it ranges from as low as 3 months to 41 years.
- Government-backed NRI bonds are considered low-risk investments as they are guaranteed by the Indian government. They offer a stable source of income and provide a sense of security to investors.
- NRI bonds provide an easy and hassle-free way to repatriate funds to the investor’s country of residence. This can be useful for NRIs who want to move their money outside India or need to fund their overseas expenses.
- Investing in NRI bonds can provide diversification to an NRI’s investment portfolio, which can help in reducing overall portfolio risk.
5. Commercial Real Estate
What is Commercial Real Estate?
Commercial real estate refers to non-residential properties that are used for generating revenue through business operations. It includes various types of properties, such as office buildings, duplex homes, restaurants, and warehouses. NRIs can earn income from commercial real estate by leasing or renting out these properties. Investing in commercial real estate in India can be a good way for NRIs living in Australia to diversify their investment portfolio and earn good returns.
Benefits of Investing in Commercial Real Estate in India
Given below are some of the reasons to invest in CRE in India:
- Commercial real estate in India has the potential to generate higher rental yields compared to residential properties. This can provide a stable source of income to NRIs who invest in commercial real estate.
- Commercial properties in prime locations have the potential to appreciate in value over time, providing Australia based NRIs with capital appreciation on their investment.
- There are many commercial real estate investment companies that offer fractional ownership wherein multiple investors or owners collectively own a fraction of a real estate property. Instead of buying the entire property, each owner buys a share of the property, which provides them with a proportional ownership stake.
- NRIs from Australia can diversify their investment portfolio by investing in commercial real estate.
Investment Procedure to Invest in CRE in India
NRIs from Australia can invest in commercial real estate in India through the following ways:
1. NRIs can directly invest in commercial real estate in India by purchasing property in their name through inward remittances from abroad or through funds held in NRE/FCNR(B) accounts.
2. They can also invest in Real Estate Investment Trusts (REITs) in India. REITs are investment vehicles that allow investors to invest in income-generating properties, without owning the property outright. REITs are regulated by the Securities and Exchange Board of India (SEBI). They provide a convenient way for NRIs to invest in commercial real estate with lower risks and higher liquidity.
3. NRIs in Australia can also invest in CRE through fractional ownership. Through fractional ownership in commercial real estate, individual investors can get partial ownership in Grade-A commercial properties by investing as low as Rs. 10 lakh investment amount.
To Conclude
There are various investment options for NRIs in Australia to invest in India. Each option has its own advantages and risks, and NRIs should carefully assess their financial goals before choosing an investment option. It is also important for NRIs to understand and comply with all applicable regulations and tax laws. By doing so, NRIs can make informed investment decisions and potentially benefit from the growth opportunities in India’s economy.
Contact SBNRI
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