With domestic sales suffering as the rupee loses value against the dollar, property developers in India are looking outside the country for an alternative market. They are hoping to tap into a growing niche within overseas property investment Non-Resident Indian investors.NRI or Non-Resident Indian refers to a person of Indian origin either born outside India or living in another country, or an Indian citizen who has emigrated. NRIs are an obvious target for investment, as they may well wish to retain links with their homeland, or return there in the future as permanent residents.
Many are taking advantage of current incentives by employers to return to India; Motorola is one such company offering a special programme. “Many NRI residents in Hong Kong, the US, UK and the Gulf have substantial assets and are keen to invest in rental properties in India,” said Nubricks.com international property analyst Chintan Mahida. Recent reports suggest that the value of NRI investment has already increased by up to one quarter in six months. This is likely to increase as, with the falling value of the rupee, these buyers can currently obtain around 20% more for their money and are thus being offered a great incentive to invest now. Omaxe is one of the major developers planning to exploit the NRI market, offering investment in both residential and commercial property in cities such as Bangalore, Chennai, Hyderabad and Delhi. They say ‘NRIs have played a very important role in transforming the Indian real estate market’, commenting that such buyers have been able to take advantage of the opportunities offered by the opening-up of the Indian economy. Other companies, such as Maa Properties in Hyderabad, are also targeting this market. On its website, Maa offers information for NRIs and PIOs (Persons of Indian Origin, foreign citizens with Indian ancestors at least four generations removed). A further change being made to enable more PIOs to buy in India is the alteration of the rule which previously only allowed them to purchase property if either their grandfather or father were Indian citizens.
This is being amended to give those PIOs with a mother or grandmother with Indian citizenship the right to buy. These changes from the Ministry of Overseas Indian Affairs are intended to revitalize the market. Although India ´s location means that it is unlikely to suffer the ´foreign invasion´ seen in some European countries, the new rules should ensure that only people with genuine connections to India will be able to purchase property, while still bringing in new investment.