The Indian investment time
By Amitabh Kumar
It is here and rollicking with great promise
Times News Network reports that non-resident Indians (NRIs) are increasingly ploughing back redemption proceeds from various NRI deposit schemes, into other domestic investments, instead of repatriating them back home. The money is being invested in real estate and stock markets, the report goes. NRIs are also picking equity stakes in Indian companies and have emerged as major component of the country's foreign direct investment (FDI), according to the recent report.
The Reserve Bank of India has local withdrawals by NRI deposits reaching a new high of $12.4 billion in FY06, up nearly three times in the last six years from $4.1 billion in FY00, which is a happy sign of this sector doing really very well since the Indian shores started inviting investment after reforms.
The Times report observes that this amounts to more than a third of total outstanding NRI deposits ($35 billion) parked in various schemes such as FCNR (B) and NRE (RA) accounts during the year. At the same time, NRIs have invested $2.2 billion in FY06, accounting for 29% of the total $7.5 billion of FDI that the country received during the year, as per the report.
NRIs are allowed to use these proceeds to invest in Indian companies under Section 6, of FEMA 1999 and these investments are included in foreign direct investment (FDI) figures. In the first half of FY07, NRIs have already picked up $1.2 billion worth equities from their local funds which form part of the country's FDI. Besides, an estimated 10% is invested in real estates though absolute numbers are not available, where relatives invest in properties on their behalf, as the Times report informs.
NRI deposits are in for returns as the interest rates return to reasonable from the measly times they had been following for several years.
About the Author
Amitabh Kumar, a writer by profession has been part of content research team of magazines, journal dealing with NRI, non resident Indian news, stories, and issues. Presently he is content writer in website http://www.nrirealtynews.com emphasizing on NRI News, property investment scenario in India.
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