Can an NRI Invest Using Foreign Funds? If so then what’s are the advantage to an NRI?
Yes, an NRI can invest in real estate using Foreign funds. Investing using foreign funds provides several advantages for an NRIs:
a. Leverage Favourable Exchange Rates
- When the Indian Rupee is weaker compared to foreign currencies like USD, GBP, or CAD, NRIs can invest larger amounts at lower relative costs.
- This maximizes their purchasing power, allowing investments in premium properties in metro cities or emerging hotspots.
b. Diversify Investment Portfolio
- Investing in Indian real estate diversifies the portfolio geographically and asset-wise, reducing dependency on foreign market fluctuations.
- India’s real estate market offers a stable long-term growth opportunity compared to volatile global markets.
c. Hedge Against Inflation
- Real estate in India serves as a tangible asset that appreciates over time, acting as a hedge against inflation in both India and abroad.
d. High Returns and Growth Potential
- The Indian real estate sector is witnessing a compound annual growth rate (CAGR) of 8-10% in metro cities.
- Strategic investments in growing markets or smart cities can yield 20-25% ROI over 5-7 years.
e. Emotional and Family Connection
- Many NRIs invest in real estate for personal use, such as second homes, retirement plans, or family purposes.
- Owning property in India helps maintain a connection with their roots.
f. Long-Term Security and Wealth Creation
- Real estate is a low-risk investment option compared to equities or mutual funds.
- Over the long term, real estate ensures wealth preservation and legacy planning for future generations.