Investing in India has always been appealing due to its expanding economy and various investment opportunities available for diversification. The easy access to financial products and digital payment methods have greatly assisted NRIs in utilizing these services and investing in their country of origin. As a result, Non-Resident Indians (NRIs) frequently look to invest in India in order to diversify their investments, take advantage of the growing economy, and maintain ties to their homeland.

As India presents various investment opportunities tailored to diverse risk appetites and financial objectives, we take a look at some intelligent investment choices for non-resident Indians seeking to benefit from India’s growth story.

Mutual Funds

Mutual funds are considered a good option for NRIs seeking diversified exposure to Indian equities and debt markets without the need to manage investments actively. Various asset management companies (AMCs) in India offer schemes tailored for NRIs, including equity funds, debt funds, hybrid funds, and sector-specific funds. However, you must check the pros and cons before investing in any individual fund and seek advice from your financial experts before taking an investment decision.

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Fixed Deposits

For risk-averse investors, fixed deposits (FDs) in Indian banks provide a safe and stable investment option. Adhil Shetty, CEO, Bankbazaar.com, says, “For fixed-return investment options, NRIs can opt for Non-Resident External (NRE) or Non-Resident Ordinary (NRO) fixed deposits. NRE FDs are tax-free in India and are fully repatriable, while NRO FDs are taxable and have repatriation limits. Some banks are offering over 7% on these FDs and you can explore these options while diversifying your investments.”

Direct Equity

Investing directly in the Indian stock market can be lucrative for NRIs with a high-risk tolerance and a keen interest in market conditions. NRIs can buy shares of publicly listed companies through a Portfolio Investment Scheme (PIS) account. India’s growth story and the performance of its stock market have attracted substantial NRI investments. Numerous banks here extend the option for Non-Resident Indians to engage in the buying and selling of shares in Indian companies.

Government Bonds and Securities

Government bonds and securities offer a stable investment avenue for NRIs. The Reserve Bank of India (RBI) issues various government bonds, such as the Bharat Bond ETF and Sovereign Gold Bonds (SGBs). These are considered low-risk investments with decent returns and are ideal for conservative investors.

National Pension System (NPS)

The National Pension System (NPS) is a retirement-focused investment option open to NRIs. It provides an opportunity to accumulate a retirement corpus with tax benefit. NPS investments are diversified across equity, corporate bonds, and government securities, balancing risk and return.

Exchange-Traded Funds (ETFs)

ETFs offer NRIs an efficient way to invest in a basket of securities, providing diversification similar to mutual funds but with the tradability of stocks. They are available for various indices, sectors, and commodities, allowing NRIs to align their investments with specific market segments or themes.

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Real Estate

Real estate continues to be a favored investment option for NRIs. The escalating urbanization and continuous development of infrastructure have led to an increase in property prices in major cities in India and emerging urban areas. NRIs have the opportunity to invest in either residential or commercial properties, both of which offer significant returns. Nevertheless, it is crucial to conduct thorough research on government and bank approvals, the builder’s track record, location, and upcoming infrastructure to evaluate future prospects.

NRIs, thus, have many options but these investments must align with your financial goals, risk appetite and investment horizon. It is advisable to carefully opt for the right investment product so that you can not only grow your wealth but also contribute to the economic growth of your home country.