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Tata Capital > Blog > Why should an NRI invest in India?

Wealth Services

Why should an NRI invest in India?

Why should an NRI invest in India?

A report suggests that India would be the second-largest economy in the world by 2050. At present, it ranks at 6th position across the globe as per the gross domestic product. So, this signifies that investing in India could be a great option for the NRIs. An economy with more than 130 crores of people holds immense opportunity in terms of investment returns in most sectors.

In this article, let us see the benefits of investing in India for the NRIs.

1. Rapid economic growth:

India’s GDP has grown dramatically over the years. It is now at the sixth position worldwide. As mentioned above, it is expected that this economy would be within the world’s top two economies in the next thirty years. The GDP forecast for the next five years suggests the economy would grow at a pace of around 6.5% to 7%. The stability in the economy reduces the risk of investment on the other hand. At present, India is having a stable government at the centre as well. So, politically the economy is also in a stable state which, in turn, reduces the volatility in the financial market.

2. Diversification:

NRIs can diversify their investment well with multiple assets. They can invest in mutual funds, alternative investment funds, bonds, CFDs, and other investment assets. Diversification helps in reducing the risk factor and also optimize the returns. The minimum investment requirements in India for many asset classes is pretty lower. This is why it is easier for the NRIs to invest in India as well.

Additional Read: How RBI Bonds Score over Fixed Deposits?

3. Higher Interest rates:

The interest rate you receive is higher in India than in many other developing countries and far better than in developed countries. While it is around 4% to 7% in India, it is 0.25% in the US, in the UK it is just 0.10%. So, you can see the huge difference in the interest rate in these countries. So, if you invest in India as an NRI, you can get great returns compared to the countries you are living in.

4. Growth in the mutual fund industry:

The mutual fund industry witnessed a sharp growth of around 4.5 times in just ten years. It was an industry of 7.31 trillion in May 2011, and now in 2021, as of May 31st, the AUM of the Indian mutual fund industry stood at Rs 33.06 trillion. So, investing in mutual funds in India can be fruitful for the NRIs if they are looking for wealth accumulation.

Additional Read: Corporate Fixed Deposits: How Do You Choose the Right One?

Conclusion

Investing in India can be beneficial for NRIs because of all the reasons stated above. Though there are certain challenges that NRIs may face like NRE or NRO account opening for investment, Demat account, with Tata Capital’s NRI services it can be a cakewalk. You can invest in different asset classes using their app as well and diversify your investment portfolio in India.

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