India’s Prime Minister Narendra Modi praised the contribution of Non-Resident Indians (NRIs) in nation-building in 2019, saying, “I consider NRIs India’s brand ambassadors.” They serve as representations of our skills and abilities.
Due to their significant contributions to a variety of industries, including banking, health and information technology services, the Indian diaspora in the US, Europe, the Middle East and the Asia Pacific has garnered widespread acclaim in their host nations. The greatest diaspora in the world is made up of Indians who are based abroad, numbering 20 million OCIs and almost 15 million NRIs. India is the country that receives the most remittances worldwide, close to $85 billion yearly. The consistent flow of remittances has been crucial in funding the trade imbalance.
In my area of business, I’ve come to understand that NRIs, like other investors, require quite distinct investing advice based on their life goals. Regarding specifically tailored financial advice for NRIs, I do think there are certain gaps. Today, the majority of the money sent home is utilized to support the family’s necessities in India.
Any additional savings are used for real estate investments. In urban cities, NRI contributions total more than 15% of yearly real estate transactions or $8–10 billion in total. The discussion boards on many NRI sites, however, discuss the lack of liquidity in their real estate holdings and delayed real estate projects.
Many NRIs wish to diversify their investments in India but have been hesitant to do so because they sometimes lack clarity and other times lack expert guidance in managing their investments specifically in India. Another simple choice is fixed deposits, which appear to provide greater interest rates than the host nations, but exchange rate volatility offers very little chance for arbitrage.
For NRI’s investing portfolio in India must include stocks. The underlying factors that, for the past 25 years, have supported the investment case for India and will do so going ahead are
An impressive domestic growth profile
The thriving and varied corporate world
The institutional framework of an advanced democracy
Easy access to capital markets and transparency
We think that the market’s enormous alpha possibilities, when compared to any other equities market worldwide, is what makes investing in India the most alluring. These alpha chances exist in major, mid-cap and small-cap markets. The Indian equities market’s SMID (small & mid) cap group, in particular, features a sizable and growing number of listed companies with diverse business strategies and little research, making it an ideal hunting ground for bottom-up stock pickers.
There are two advantages to increasing NRI investments in Indian stocks. First, many NRI investors are headquartered in the Middle East, where equity markets are typically less developed than those in the US, Australia or the UK. Therefore, diversifying into Indian shares would greatly benefit them, and experienced fund managers will provide individualized financial planning combined with flexibility and simple repatriation. Another significant benefit is that it will aid in expanding India’s local markets. Hence, we would like to rest our case here. Now, the ball is in NRIs’ court.