On this version of NRI Discuss, we communicate with Sreepriya NS, Co-founder and Director of Entrust Household Workplace, to grasp why globally savvy NRIs are more and more eyeing these frontier economies for tactical development.
From beneficial demographics and bettering infrastructure to strategic diversification and early-stage funding alternatives, these areas are drawing consideration for extra than simply their development potential — they provide resilience, attain, and a brand new edge to international wealth methods. Edited Excerpts –
Q) How are NRIs India as a long-term funding vacation spot? And what are the opposite scorching international locations which they put money into?
A) NRIs proceed to view India as a compelling long-term funding vacation spot, pushed by its sturdy home consumption, demographic dividend, and a quickly formalising financial system.
Many are drawn not simply by the potential for monetary returns, however by the emotional and strategic worth of investing of their nation of origin — whether or not that’s by actual property, startups, listed equities, or legacy planning.
Concurrently, NRIs are more and more diversifying their portfolios throughout geographies. Nations like Singapore, the UAE, the US, and the UK stay engaging resulting from their steady monetary ecosystems, regulatory ease, and entry to international funding alternatives.
Specifically, Singapore and Dubai are rising as funding hubs resulting from their tax effectivity, business-friendly environments, and proximity to India.
Moreover, many NRIs with household or enterprise linkages overseas put money into native actual property and personal funds, aligning these investments with their international life-style.There may be additionally a rising pattern of tactical investments in rising markets comparable to Vietnam, Indonesia, choose African nations, and elements of Japanese Europe, providing high-growth potential.This pattern displays a balanced technique: India continues to signify ‘roots and returns’, whereas international markets present ‘attain and resilience’.
Key Statistics (as of Dec 2024):
• Mutual Fund Investments by NRIs: Approx. USD 18–20 billion (~INR 1.6 lakh crore)
• NRI Financial institution Deposits: Approx. USD 162 billion (~INR 13.7 lakh crore) throughout FCNR, NRE, and NRO accounts
Q) There may be massive debate on social media about taxation. Assist us perceive why NRIs In Dubai, Singapore & Mauritius must pay zero tax on mutual fund positive factors?
A) In case of Mutual funds, (which as per SEBI regulation, are established as a belief) the positive factors from sale of a unit can’t be handled the identical as positive factors from sale of share of an organization.
Therefore beneath the Article 13 (5) of the DTAA with the above international locations, the positive factors are taxable solely within the nation of residence of NRIs of such international locations, and never in India.
Q) How a lot cash is transferring in actual property/REIT/fractional funding? Is the fitting method?
A) Whereas particular knowledge on NRI investments into REITs and fractional possession fashions in India stays restricted, the broader pattern in actual property funding is critical.
NRIs invested roughly USD 3.1 billion (INR 26,000 crore) in Indian actual property in the course of the first half of 2024, following a complete funding of round USD 13 billion in 2023.
The rising curiosity in REITs and fractional possession platforms displays a shift towards extra structured, accessible, and diversified actual property funding alternatives.
These fashions supply NRIs the benefit of transparency, liquidity, and decrease ticket sizes — making actual property participation extra possible with out the operational complexities of direct possession.
Whereas not a one-size-fits-all method, REITs and fractional investments are more and more seen as environment friendly, regulated, and scalable avenues for NRIs to take part in India’s actual property development story.
Many NRIs proceed to carry vital actual property property in India, regardless of having settled overseas for many years.
At Entrust, we’ve supported households like one from Hyderabad, now within the U.S. for over 35 years, with managing their residential and business properties.
The true problem usually lies with the subsequent era, who face the burden of inheritance, tenant administration, and compliance from afar.
As a bespoke household workplace, we assist simplify this complexity—providing peace of thoughts and sensible options to allow them to give attention to their lives abroad.
Q) What are the massive errors which NRIs ought to keep away from when making funding in India?
A) One of many largest errors NRIs usually make when investing in India is approaching it with the identical mindset or assumptions they use of their resident international locations. India is a dynamic, high-growth market — but it surely additionally comes with its personal set of regulatory, taxation, and liquidity nuances.
The foremost vital factor to think about whereas investing in India is to have readability in regards to the function of such investments. This determines additional necessities – comparable to money flows, inheritance/property planning, repatriation and so forth. from such investments.
It additionally simplifies the asset allocation resolution and the choice of merchandise/automobiles. Within the absence of such readability, one will get caught within the ‘newest’ pattern of funding merchandise, or the popular choices of the vendor/distributor.
A couple of widespread pitfalls to keep away from:
1. Lack of Readability on Goals
2. Overexposure to Actual Property
3. Ignoring Tax Implications
4. Utilizing Casual Channels(Investing by household or pals and not using a correct authorized or advisory framework may end up in misaligned choices and, in some instances, lack of management or transparency)
5. One-Measurement-Matches-All Strategy: Assuming what works for resident Indians will work for NRIs might be deceptive. NRIs have entry to completely different funding alternatives and dangers, and want tailor-made methods that think about foreign money publicity, repatriation guidelines, and international asset allocation.
The secret is to method India with skilled steerage, clear intent, and a balanced view — combining emotional reference to monetary self-discipline.
Q) What’s the cash mindset which NRIs comply with? Are there any widespread attributes?
A) There isn’t any single, uniform cash mindset that defines all NRIs. Their funding method and monetary behaviour fluctuate considerably based mostly on their stage of life, their nation of residence, their monetary objectives, and evolving private circumstances.
Nonetheless, some widespread attributes do emerge. Many NRIs show a robust choice for monetary prudence, long-term wealth creation, and portfolio diversification throughout geographies.
Their methods usually replicate a stability between emotional ties to India and sensible issues pushed by international publicity and alternatives.
Relying on their targets—whether or not it’s retirement planning, wealth preservation, or legacy creation—their mindset evolves in alignment with their particular person context and the macroeconomic atmosphere.
In essence, whereas there isn’t any monolithic mindset, there’s a constant give attention to strategic, knowledgeable, and goal-oriented monetary planning.
Q) Which funding choices or asset lessons are scorching favourites of NRIs and why?
A) Fairly than figuring out “favourite” asset lessons in a broad sense, our method is rooted in understanding the distinctive wants, targets, and danger profiles of every NRI household. Funding choices are extremely individualised and based mostly on their life stage, monetary objectives, and geographic publicity.
That stated, most NRI portfolios usually comprise a diversified mixture of asset lessons — together with listed equities, debt devices, mutual funds, actual property, REITs, and different funding avenues comparable to non-public fairness or structured merchandise. This diversification helps stability development, revenue, and capital preservation targets.
Finally, we don’t prescribe investments based mostly on recognition, however supply options tailor-made to every consumer’s monetary technique and long-term imaginative and prescient.
Q) Which sectors are extra most well-liked when NRIs look to put money into India?
A) NRIs usually don’t exhibit a robust bias towards any single sector. As a substitute, they like a diversified allocation throughout the broader Indian market.
This method not solely aligns with prudent funding ideas but additionally displays confidence in India’s multi-sectoral development story.
India’s attractiveness as an funding vacation spot lies in its strong and resilient financial system, providing alternatives throughout sectors comparable to monetary providers, expertise, healthcare, manufacturing, infrastructure, and client items.
Fairly than chasing sector-specific tendencies, most NRIs search balanced publicity that captures the general development momentum of the nation whereas managing danger successfully.
NRI traders are usually sector-agnostic however prioritize market-driven methods with a robust give attention to liquidity and repatriation.
At Entrust, we’ve curated bespoke methods for NRI purchasers — one in every of which is a dividend-yield portfolio we have used during the last 5 years.
It’s equity-oriented with a defensive tilt, targeted on prime quality dividend paying corporations to make sure steady returns.
Notably, dividends are 100% repatriable beneath RBI norms, making this an efficient income-generating and risk-mitigating technique in as we speak’s unstable atmosphere.
Q) What about luxurious gadgets – artwork, vehicles, watches which of the themes are scorching favourites?
A) Luxurious collectibles comparable to artwork, classic vehicles, and high-end watches usually type part of an NRI’s life-style and legacy portfolio, however preferences on this area are extremely private.
These decisions are usually pushed by particular person style, ardour, and in lots of instances, a want to protect heritage or specific id.
For some, pursuits in artwork, music, or cultural artifacts are intently tied to philanthropic values or legacy planning — supporting causes, establishments, or cultural preservation initiatives. Fairly than being pushed purely by funding returns, these property usually replicate emotional and aesthetic issues, making them deeply distinctive to every household.
(Disclaimer: Suggestions, solutions, views, and opinions given by consultants are their very own. These don’t signify the views of the Financial Occasions)
