An estimated 30 million NRIs, living in 130 countries, are sending remittances back to India regularly. According to the World Bank, India continues to retain the top slot in remittances by expatriates from abroad.

Remittances are likely to touch 4 58 billion
For 2011, NRI remittances are likely to touch 4 58 billion against China’s 4 57 billion. In 2010, India received 4 54 billion in foreign exchange remittances , three percent of India’s GDP, beating China’s 4 53 billion.

Real estate is preferred
The rupee depreciation and West Asian currencies linked to dollar which is appreciating against the rupee are major driving forces that resulted in a surge in remittances to India. The remittances are mainly used for family needs and investments in stocks, property and term deposits. Real estate here is preferred because of a desire to create a higher lifestyle for the family and the price appreciation in the long term.

Trend is going to pick up in the coming months
Though there was an interim sluggishness in NRI investments, industry experts feel the trend is going to pick up in the coming months due to the uncertainty prevailing in the global economy and the attractive investment opportunities offered here. There are opportunities opening up for developers in new markets such as Mauritius. This is ample proof of the surge in NRI investments in real estate.

NRIs get almost all the privileges
An Indian citizen who resides outside India is permitted to acquire property in India other than agricultural, plantation property and farmhouse. NRIs get almost all the privileges that residents have while investing in real estate.

What can NRI’s purchase in India?
They can acquire, inherit, transfer and gift residential or commercial property. The purchase can be made through funds remitted to India through normal banking channels or funds held in certain types of accounts maintained in India. They can get home loans, mortgage loans and loans against future rental income.

How much can NRI’s remitt outside India
While sale proceeds up to two residential properties can be repatriated after a lock-in period of three years, there is no restrictions on commercial property. Up to one million dollars per year from such a sale can be remitted outside India from a non-resident ordinary account. Rental income can be repatriated after payment of tax, wherever applicable.

Navyroof.com explores the criteria NRI’s should consider when investing in property in India.

1. Broad understanding of projections for overall economic growth
The Indian economy is booming with an annual GDP growth rate of 8.5- 9% creating a class of potential investors with significant disposable income. As Indian housing remains a concern in major metro cities, sufficient demand generators for residential units are there for the next decade. However not all cities are the same so buyer beware.

2. Understand in which region to invest
Indian property prices are increasing at varying levels in different regions in India. It is very important to understand what are the key drivers in these areas, for example is it investor driven or end user demand fueling prices.

3. Whether the buying decision is for return on investment or for end usage
If you are renting a Indian property and simply looking for a yield, then investment decisions may be slightly different then if you planning to live in it. However when it comes to selling the Indian property investors need to take in to consideration who will buy this property from them. What will these buyers be looking for in terms of facilities, schools and amenities?

4. Credibility and track record of developer
This is critical in buying and selling Indian property. Investors have more confidence in builders with good track records, history of good completions and delivering on time. Also when selling Indian property, new buyers can rest assured construction has been carried out to certain levels by trusted builders which makes it easier to sell on.

5. Safety / liquidity of the investment
Is the developer new to developing and do they have the liquidity to deliver your project? Ask for proof of financial position, developers who have nothing to hide will gladly show. Again track record is always good to go on and remember if it sounds too good to be true, it probably is.

6. Ease of remittance of instalments
Agree an upfront payment schedule with clear targets that must be reached before you pay various instalments or “slabs”

7. Repatriation of profits
It is imperative NRI’s become familiarised with FEMA regulations on repatriation of funds out of India. To read more on this please click here

The Indian economy has emerged as one of the most robust economies of the world and despite difficult times, investments in India continue to attract Non Residents Indians (NRI).

What is an NRI or PIO?
The Foreign Exchange Management Act, 1999 (FEMA) defines NRI as a person resident outside India who is an ‘Indian citizen’ or a ‘Person of Indian Origin’ (PIO). FEMA broadly regulates matters related to NRI investments viz., investment in immovable property, foreign exchange, bank deposits, government bonds, investment in shares, units, securities, and foreign direct investment in India. However, due consideration should be given to Income-tax implications on income generated from investments in India and to Reserve Bank of India (RBI) regulations.

Purchase of immovable property in India
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the accounts maintained in India as mentioned above. NRIs can also avail loans from commercial banks for purchase of immovable property. General approval has been granted by RBI to financial institutions for granting loans to NRIs. Repayment of loans can be made out of the NRE/NRO/FCNR accounts maintained in India.

Transfer of immovable property in India
NRIs are also allowed to transfer immovable properties to an Indian resident, NRIs or PIOs. There is no lock-in period for sale of residential/commercial property. Further, NRIs can remit abroad an amount up to $1 million per year from the sale of immovable property in India, subject to certain conditions. NRIs are also allowed to gift any residential/commercial property in India to a person resident in India or to an NRI or PIO subject to certain exceptions. Long term capital gains on transfer of immovable property are subject to 20 percent tax rate whereas the short term capital gains are subject to tax at the applicable individual slab rates.

The ministry of overseas Indian affairs is bringing together real estate developers, government officials, both from the Centre and the states, and Indians living abroad in a first-of-its-kind seminar aimed at resolving property disputes in Delhi on Monday. “The seminar would cover the role of different government and private agencies, measures to prevent disputes…and speedy way of disposal,” said a posting on the website of the Indian consulate in New York.

Indians living abroad are a “major source of foreign exchange remittances that has led to the present state of comfortable foreign exchange reserve in the country”, the posting adds, and a substantial amount of money earned by non-resident Indians (NRIs) is spent on buying Indian property back home. The ministry has been receiving a lot of complaints from Indians living abroad, mostly in the US, the UK and Canada, about properties not being delivered on time or usurped by local people, said Vayalar Ravi, minister for overseas Indian affairs. “This is an attempt to help NRIs and PIOs (persons of Indian origin) resolve disputes with Indian property developers and state bodies in India,” he added.

The ministry is trying to start a “constructive dialogue” between NRIs and Indian real estate developers, and include in it lawyers and government officials, according to an official responsible for holding the seminar. “We need cooperation of the state governments as well,” said this official who did not want to be named because he isn’t authorized to speak to the media. “Only Punjab and Kerala have special cells to address problems faced by NRIs… We have been pressuring other states to start similar cells, launch fast-track courts and so on,” he added.

The meet could benefit thousands of NRIs, who on their own, can do little to pressure property developers to finish construction on time. Some have formed online groups to start collective bargaining but because they live abroad, haven’t had much success in securing their rights. “It’s hard-earned money that we have invested back home,” said Asim Debnath, a US-based Indian who had bought a flat in a condominium in Rajarhat on the outskirts of Kolkata, which was sold only to NRIs. The property isn’t ready yet, and the developer is blaming the lack of civic infrastructure in Rajarhat township for the delay in completion.

With Indian real estate prices in the niche segment in India showing signs of robust recovery, high net worth Indians and NRIs are again eyeing foreign shores for real estate investments reports the Economic Times. Many are now turning to invest in UK property and other markets.

With real estate prices going down by a whopping 25-30% and hitting rock bottom in some geographies and distress asset sales becoming the order of the day, there could be no better time than this to pick up a dream home abroad. And experts confirm that the decision to buy property overseas is driven strongly by an end-use perspective.

Some of the places which now offer good investment opportunities for HNIs include the Middle East especially Dubai. In USA it’s particularly New York City, Virginia and San Francisco. The others include Singapore and UK, according to Rajiv Sahni, partner, real estate practice, Ernst & Young.

Mayank Patel, group chairman & CEO of Azibo Group, a London-based private investment firm, who is himself a real estate investor agrees that globally there are huge opportunities to invest in UK real estate because of distress sales. “I am an investor in real estate myself and feel that the UK provides good opportunities for high net worth non-resident Indians and people of Indian origin. This is mainly because the pound sterling has fallen against the Euro and the dollar and UK property prices of various prime properties are much lower today than they were about a year ago. So NRIs who are based in the US or Europe will find good deals here. Also worldwide, in locations across geographies such as Dubai, Abu Dhabi, France, Spain, Florida and New York, property prices have fallen 30% over the last one year, because of distress asset sales and the credit squeeze by banks and FIs. While the Indian community globally, does have sophisticated portfolios, the fundamental business culture is one of going in for fundamental investments in real estate – and that’s the reason that many of the HNIs are grabbing the investment opportunities globally,” says Patel.

Find investment properties in the UK

The NRI buyer is once again looking seriously at investing in the India story, especially in the real estate sector according to the Economic Times. There are so many reasons for non-resident Indians (NRIs) to buy property in India, chief among them being the fact that they eventually would like to settle here. Even if they do not actually live in India all the time, having a base in India is a high priority.

The second reason is that India has not been affected so deeply by the recession and the economy is doing reasonably well. Banks too have taken proactive steps to allow easier inflow of funds for such purposes.

Raminder Grover says, “NRIs are showing an interest in safe projects, where bank loans are easily available. They want to invest in soonto-be-ready projects and also locations that are central, rather than those which have a long gestation period. They are extremely savvy, with relatives here to safeguard their interests – another big reason to invest in India.”

The Global Organization of People of Indian Origin (GOPIO) will pressure the Indian government to amend Indian property laws to protect the interests of NRIs at its annual conference in the US this week reports the Times of India.

“Though our main theme is ‘People of Indian Origin: Strengthening Global Connections’, our thrust this year is to put fresh pressure on the Indian government to change Indian property ownership laws for NRIs,” outgoing GOPIO president Inder Singh said.

“How can we wholeheartedly involve ourselves in India’s development if someone steals our property investments and properties in our absence? The current Indian property laws are so outmoded that they are not even fit for Indians, let alone the diaspora,” Singh said.

“We are 25 million in strength and pumping billions into Indian property. And don’t forget that it was the NRIs who ushered in the IT revolution in India to set it on the path to greatness.

“India should realise that we matter a lot in its aspirations to become a superpower,” he said.

The large Non Resident Indian (NRI) community are reportedly re-entering the Indian property market. In a recent study by Assocham on the real estate scene in India, they say that Malayali and Punjabi NRIs are buying the houses of their liking.

It is a well-known fact that Malyalis and Punjabis have migrated in hordes over the years. Some of them are also buying commercial space. Of course, that does not mean that NRIs from other states are not purchasing houses in either their home towns or other parts of India.

DR. Devender Gupta,CMD of realty advisory Century 21 India, says that that more often than not NRIs buy Indian flats in the range of Rs 60 lakhs to Rs 80 lakhs. They buy Indian properties for purely investment purpose. There is hardly any emotional factor that is involved in. As and when they get good appreciation on their properties, they dispose it off.

Meanwhile, with real estate prices at an all-time low across borders, buying property abroad is suddenly making sense to affluent Indians. The property downturn is not just confined to India. property has crashed  in other countries including the US, the UK and the Middle East and many Indians are seeing this as an opportunity to buy property globally.