NRI Real Estate and Property Investment in India
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India- A Lucrative Destination for Nri Investment
Friday, December 28, 2007

India is fastly emerging as the hottest investment hub for NRI's. The country is the 10th largest economy in the world and the 4th largest in terms of purchasing power parity (PPP). India has a massive pool of skilled labour which is internationally cost-competitive, a large entrepreneurial base and an expanded manufacturing sector, which make it a lucrative destination for partnership, resulting in easy collaborations.

The country has a very strong scientific and technical manpower, which is around 20 million; surprisingly the figure surpasses the population of Taiwan. The number of literates in India is more than the combined population of France and Japan. The country has a huge domestic market with a 300 million-strong middle class population with substantial purchasing power and another 700 million-strong population whose capacity to purchase is steadily increasing. Being a vibrant democracy with a large democratic set-up supplemented by a broad-based legal framework including arbitration and an independent judicial system, it boasts of a vast network of bank branches, financial institutions and well-organized capital and money markets. All these features make the country and attractive destination for NRI investment.

Also to motion is the mammoth network of technical and management institutions of the highest international standard for development of excellent human resources. India has an enviable record of honouring its international financial obligations and has never defaulted. The country has a strong English language base for business purposes. The strong and vibrant small-scale sector is good enough for establishing strategic alliances with its foreign counterparts. The strategic location of the country in the context of the third world markets particularly the rapidly growing South and South-East Asian markets together with a supportive infrastructure base help in promoting a healthy environment for NRI inflows into the country.

According to recent prediction of the World Bank Report Indian economy is expected to become one of the world's largest by 2050 A.D. What started as a slow uprising in the 1980's is now fastly emerging like a torrent. India's economy is on the bull run of an ever-increasing growth. With positive indicators such as a stable 8-9 percent annual growth, rising foreign ex-change reserves of close to USD 180 billion, a booming capital market with the popular "Sensex" topping the majestic 20000 mark, the Government of India (GoI) has estimated an FDI inflow of USD 12 billion during this fiscal and a 35 percent plus upward growth in exports.

It is easy to understand why India is one of the top destinations for foreign investment. The Indian economy has grown by 8.9 percent during the first quarter of '06-07, which is the highest first-quarter growth rate since 2000-01. In this period, the manufacturing sector grew by a high 11.3 percent and agriculture, which constitutes nearly a quarter of the GDP, grew by a robust 3.4 percent. Trade, hotel, transport and communication sectors grew by 9.5 percent and construction grew by 13.2 percent.

In the corresponding period of last fiscal, these sectors grew by 11.7 percent and 12.4 percent, respectively. Electricity grew by 5.4 percent in the first quarter as against 7.4 percent in the same period last year. The overall growth in this sector was fuelled by growth in July and August. The service sector also grew by 10.6 percent in the first quarter of '06-07 as against 9.8 percent last year for the same quarter. There has been an outstanding growth in some important industries of the Indian economy, like commercial vehicles (36 percent), telephone connections (48.9 percent) and passenger growth in civil aviation (32.2 percent).



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