Despite RBI’s Policy Revisions, India Will Remain Top Choice for Indian Investors
If you have money to invest, chances are that you will be in a position to enjoy the RBI’s recent hike in remittances. Due to the stability in the foreign exchange market, the RBI has decided to relax the credit limit as per the liberalised remittance scheme (LRS) and has hiked remittances, and this will allow you, the investor, to buy assets up to $250,000 a year. However, despite the markets in the US, New Zealand and Denmark yielding 100 per cent returns and other emerging investment destinations, India still remains the top investing destination for Indians with money to invest. This is according to an S&P Dow Jones Indices report that was published on January 30, 2014, which states that in 2014, Indian equities performed much better than other developed countries, with over 50 per cent returns. In comparison, equities in developed countries recorded returns impressive returns of 72 per cent and other developing countries recorded 19 per cent returns.
Investment advisors say that the central bank’s decision to increase the forex remittance limit is welcome move and will give Indian investors the flexibility to put their money in different investments and to diversify their portfolio; but despite this, investing in India is in. In the real estate industry, there is a lot of positive sentiment in terms of investment in Indian real estate. The RBI has, as part of its bimonthly policy review, tripled the foreign exchange remittance limit since 2014, given that the outlook of the foreign markets is good but this has hardly resulted in money being invested heavily in foreign markets and has actually seen Indian investors look at avenues for investment within India itself.
Many industry experts feel that when having money to spend and the opportunity to spend it in light of the RBI’s policy revision, Indian investors would rather seize opportunities within the country, which are very favourable at the moment. They are looking at growing investments in India, despite influential and rich investors traditionally parking their money in high-profile and sophisticated places like Dubai, Singapore and London. Thus, despite the RBI’s increase in remittance limit, we are not going to see a huge outflow of capital to foreign markets.
The RBI had, in 2013, reduced remittance limit to $75,000. The foreign exchange market has been performing with much stability. It does show remarkable optimism that despite foreign markets performing extremely well, Indian investors want to invest in India. The RBI has also offered many protections and benefits for Indian investors investing abroad, including safeguard against downside risks, better rules for foreign portfolio investors in government securities and corporate bonds and other measures.
Investing in India is a huge opportunity for outsiders but Indians investing in the country can do much more to change and enrich the system from within. With sectors like infrastructure, real estate, automobiles, pharmaceuticals and much more poised for growth, there is a lot of investment potential in the country. Added to this, the new government’s interest in reforms and economic liberalization, coupled with a strengthening middle class, make India a favourable destination for Indian investors.
In fact, the real estate body in the country, NAREDCO, was hesitant about RBI’s decision to increase investment limits for people, opining that this could deflect Indian investments away from Indian real estate markets. But in fact, more Indians are interested in investing in India. NAREDCO’s concerns are valid, seeing as real estate in the country has been experiencing lower sales and large unsold inventories, contributing to an overall slump in the market sentiment. Taking measures to encourage more investment in the domestic market would be a good idea, according to NAREDCO. In fact, Indians have been the top investors in property in Dubai real estate in 2014, with investments totalling about Rs 3,025 crore and also accounting for 6 per cent of the purchases in US but the S&P Dow Jones Indices report very differently, stating that for the short term, Indians are looking at their own country.
Indian investors, invest in India, investments in India, liberalised remittance scheme, Naredco, RBI, RBI policy
