If you are an NRI living in the UAE, investing in India can be a great way to diversify your portfolio and earn stable returns. India has a rapidly growing economy and a large market, offering numerous NRI investment options. In this blog, we will discuss five investment options in India for NRIs from the UAE. By exploring these investment options, NRIs can gain valuable insights into the Indian investment market and make informed decisions that align with their financial goals and risk appetite.
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Investment Options in India for NRIs from UAE
Given below are the top 5 investment options in India for NRIs from the UAE:
1. NRI Mutual Funds
Like resident Indians, NRIs can invest in mutual funds in India. NRI mutual funds are an ideal investment option for NRIs (Non-Resident Indians) to diversify their investment portfolio in India and earn attractive ROI over time. There are thousands of mutual fund schemes in India to cater to various investment needs of NRIs. Moreover, professional fund managers help investors generate attractive returns while mitigating the risk by spreading the investment amount across a variety of asset classes.
Why Should NRIs invest in Mutual Funds?
NRIs in the UAE may consider investing in NRI mutual funds for the given reasons:
- Mutual funds offer a diversified portfolio of stocks, bonds, and other financial instruments, which can help reduce investment risk. Investing in a mutual fund allows NRIs to spread their investments across sectors, companies, and assets, reducing the impact of any single stock or asset’s performance.
- They are managed by experienced professionals who use their knowledge and expertise to make investment decisions. As a result, NRIs can benefit from the professional management and expertise of fund managers.
- Over the long term, mutual funds have the potential to generate higher returns than other fixed return investment options. While there are risks associated with mutual fund investments, the potential returns can be significantly higher.
- Mutual funds offer flexibility in terms of investment amount, investment horizon, and risk appetite. NRIs can invest in mutual funds as per their financial goals, risk appetite, and investment horizon. Moreover, mutual funds offer liquidity, allowing investors to redeem their units at any time, making it easier to manage their investments.
- There are multiple mutual funds for UAE-based NRIs to invest in India. Depending on their investment goals and risk tolerance, they can choose to invest in any of them.
2. Corporate Fixed Deposits
Corporate fixed deposits (FDs) are a type of fixed deposit where NRIs can invest their money in a company for a fixed period at a predetermined rate of interest. These FDs are offered by private and public sector companies, including financial institutions, and are a popular investment option for NRIs in India.
Why Should NRIs invest in Corporate FDs?
Given below are the reasons why NRIs living in the UAE may consider investing in Corporate FDs:
- Indian Corporate FDs interest rates are higher than bank FDs, making them a more attractive investment option. Since companies typically offer higher interest rates than banks, investing in corporate FDs can help NRIs earn higher returns on their investments.
- They offer flexibility in terms of investment amount, tenure, and interest payment frequency. NRIs can choose to invest in corporate FDs based on their financial goals, risk appetite, and investment horizon.
- Corporate FDs allow NRIs to diversify their portfolio beyond traditional investments like stocks and mutual funds. NRIs can invest in a wide range of companies across various sectors, spreading the investment risk.
- Corporate FDs are more liquid than Bank FDs. Hence, it is easier to withdraw them in case of financial emergencies.
3. Managed Farmlands
Managed farmlands refer to agricultural lands owned by individuals or organizations that are tended to and supervised by specialized firms. These lands’ productivity can differ depending on various factors such as soil quality, type of management, and plantation. NRIs have the option to invest in managed farmlands through Growpital.
Why Should NRIs invest in Managed Farmlands with Growpital?
Given below are the top reasons why UAE-based NRIs should consider Growpital for agri-investment folio:
- Growpital offers appealing tax-free returns on investment to retail investors, which fall in the range of 10-17%.
- The company has a team of farm experts who carefully evaluate several underlying factors such as soil quality, water availability, connectivity, and more to select the land for cultivation.
- NRIs living in the UAE can choose from a diverse range of farm projects under Growpital.
- By investing in Growpital’s agri-investment projects, NRIs from UAE can include diversification in their investment portfolio, which provides protection against inflation and market volatility.
4. Portfolio Management Services
In Portfolio Management Services (PMS), fund managers manage the portfolio on behalf of the investor by making investment decisions based on their investment goals, risk tolerance, and investment horizon. PMS provides investors with personalized investment solutions tailored to their specific needs. You can start investing in PMS with Rs. 50 Lakhs.
Why Should NRIs invest in PMS?
Following are the benefits of investing in portfolio management scheme for NRIs living in the UAE:
- PMS is managed by experienced and qualified fund managers who have in-depth knowledge of the market and the economy. These fund managers use their expertise to make informed investment decisions on behalf of the investors.
- It provides personalized investment solutions tailored to the specific needs of individual investors. The investment portfolio is customized based on the investor’s risk profile, investment goals, and investment horizon. This allows investors to have a diversified portfolio of assets that are aligned with their investment objectives.
- PMS provides investors with exposure to a diverse range of asset classes. This diversification can help reduce the overall risk of the portfolio and provide investors with better risk-adjusted returns.
- This investment option provides investors with regular reports on the performance of their portfolio. Investors can monitor the portfolio’s holdings and transactions through an online portal.
5. Commercial Real Estate
Commercial real estate refers to non-residential properties such as office buildings, duplex homes, restaurants, and warehouses that are used for generating revenue through business operations. Investing in commercial real estate in India can be a good way for UAE based NRIs to earn good returns and diversify their investment portfolio.
Why Should NRIs invest in Commercial Real Estate?
Given below are the top reasons to invest in CRE in India:
- Commercial real estate in India offers high rental yields compared to residential properties. This makes commercial real estate an attractive investment option for NRIs looking for steady rental income.
- CRE in India has the potential for capital appreciation, especially in growing cities and commercial hubs. As the demand for commercial properties increases, the value of the property can appreciate, providing investors with capital gains.
- 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.
- There are many commercial real estate investment companies in India that offer fractional ownership.
- UAE based NRIs can diversify their investment portfolio by investing in commercial real estate in India.
In conclusion, there are several investment options available for NRIs in the UAE that can help them achieve their financial goals. It is important to research and evaluate each option before making an investment decision. By carefully planning and diversifying their investments, NRIs in the UAE can make the most of their savings and secure their financial future.
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Yes, NRIs can invest in the Indian stock market by opening a Portfolio Investment Scheme (PIS) account with a designated bank that is authorized by the Reserve Bank of India (RBI). Through this scheme, NRIs can purchase and sell shares and debentures of Indian companies on a recognized stock exchange.
NRIs can invest in Mutual Funds in India by following the below steps:
1. Firstly, NRIs need to open an NRE/NRO/FCNR bank account.
2. NRIs must obtain a PAN card from the Indian Income Tax Department. The PAN card is required for all financial transactions in India.
3. They should then complete the KYC process with the mutual fund company they wish to invest in. They must provide their basic details and relevant documents.
4. There are a wide range of mutual funds in India. NRIs can select a fund that aligns with their investment objectives, risk profile, and financial goals.
5. NRIs can invest in mutual funds in India through various channels, such as online investment portals and mobile apps like SBNRI app. They can also invest through their NRE/NRO/FCNR account.
Yes, NRIs can invest in Public Provident Fund (PPF) in India. However, an NRI can open a PPF account when he/she was resident Indian.
Yes, NRE FD Account, FCNR FD Account, ELSS Funds, Managed Farmlands and Life Insurance are a few tax-free options available in India for NRIs.