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- Investment Policy for Overseas Investors
Investment Policy for Overseas Investors
Indian Government has come up with a liberal and transparent policy for Non Resident Indians (NRIs) interested to make considerable investments in India. Most sectors are open to Foreign Direct Investment (FDI) under the automatic route.
According to fresh guidelines, NRIs can invest up to 100% under via automatic route in realty sector including development of commercial as well as residential property. They can also entertain their interest in the development of townships, city and regional level urban infrastructure amenities including roads and bridges.
NRIs can also pump in money in Indian companies engaged in Air Taxi operation. For foreign companies, FDI is allowed only up to 49%. Furthermore, they can also invest in different activities under Foreign Exchange Management Act (FEMA) Regulations in the activities such as mutual funds, PSU Bonds.
The list of privileges for the NRIs does not just end here. India has much to offer them. Now, NRIs are also permitted to invest up to 100% equity in partnership concerns whereas the foreign companies are not allowed to entertain their interests through such route.
Next to come are Portfolio Schemes under which NRIs are permitted to invest in high priority in shares and debentures through secondary market purchase from the stock exchanges. However, there is an investment limit for the share at 5% whereas it is 10% for the debentures which is much high than the foreign investors portfolio investment limits.
This step is taken as a bid to attract good investments by NRIs. However, it certainly seems to be a time to rejoice for our NRI friends who stay across seven seas but are still rooted to their motherland. :)CommentQuote0Flag
- Result of this liberalisation
All these encouraging policies for NRI have no doubt given a boom to foreign investments in Indian real estate sector. But at the same time this is one of the important reason, as I think, that have given the present hike to real estate prices in some of the important locations in India.
This simply has created a competition in front of Indians with limited incomes in comparision to NRI 's foreign earnings. As a result of sky touching prices of property, it has become difficult for an average Indian to think of buying a piece of immovable property specially in good locations (which I would say has been captured by non resident Indians!!)CommentQuote0Flag