Why and where to invest in property in India

real estate investment

Real Estate investment has always been a lucrative option. It still attracts a lot of investors for building on wealth as it promises good returns. Real Estate covers:

  • Housing sector
  • Retail
  • Hospitality
  • Commercial

Indian Real Estate sector is also a good option for NRI investors as there is a lot of scope and potential for growth in a large number of Indian Cities.


Read: Increasing Benefits of Property Investment in India


There are many factors which influence Real Estate Investment Decisions:

  • Political Stability
  • Infrastructural growth
  • Connectivity of a place to airports and other major cities
  • Government Policies in General and Particular for the area – ease of business, transparency, speedy disposals of proposals etc.
  • Tax benefits
  • Quality of Life – Basic Amenities, Education and health facilities
  • High paying jobs – more beneficial for investment in the housing sector
  • Migration – Inflow of people
  • Prospects for future development
  • Emotional bonding with hometown – the special reason for many NRIs as they want to create an asset in their hometown to settle down after they come back to native place
  • Affordability

When it comes to choosing cities for Indian Real Estate Investment, Delhi, Mumbai, Chennai and Kolkata has always been a favourite. They have had their share of growth and development. There is saturation in the property market. The possibility of future growth is limited.  Now their periphery area is attracting investors, eg. Navi Mumbai.


Read: Investment Options for NRIs


Recently, the Tier II Indian cities are attracting real estate investment, as:

  • Government’s efforts: Indian Government’s Smart City projects under which they aim to develop Tier II cities by providing core infrastructural facilities, a decent quality of life and clean environment besides smart solutions. Economic decisions like GST and regulatory authority like RERA which has brought transparency and accountability are also boosting investment.
  • Property is available at affordable price and high Rental Income
  • Improving Infrastructure, health facilities and educational institutions
  • Migration

List of top most Indian Cities for Real Estate Investment with reasons:

  1. Bangalore – Infrastructure, Connectivity, IT sector induced demand
  2. Chennai –Rising demand due to fast-growing economy (manufacturing, health, automobile, technology sector), Affordable property rates and good rental rates.
  3. Mumbai – areas like Thane and Navi Mumbai enjoy proximity to Mumbai, Employment Opportunities, and demand for residential accommodations.
  4. Pune- Lot of migrants in the IT sector has drawn steady demand for further investment
  5. Hyderabad – Presence of IT employees raises demand in housing and retail sector, Connectivity to Airport and State Government facilities for investors
  6. Kochi – Government’s initiatives like single window clearance, discounts to NRIs for investing, better infrastructure, educational Institutions drawing migrants, all are leading to property sector growth.
  7. Ahmedabad – Employment Opportunities, Improved Infrastructure, demand for houses, Transparent and easy procedures
  8. Bhiwadi – City is catching up for Investment. Proximity to Gurgaon and International Airport, IT sector presence, Affordable prices, Infrastructure are an advantage.
  9. Thiruvananthapuram – Growing IT sector, City’s tourism potential, Infrastructure, Healthy Lifestyle.
  10. Coimbatore- City is close to many tourist destinations, upcoming infrastructural facilities, growing service sector including IT firms, Flourishing manufacturing and retail industries.

Read: Government Initiatives and NRI Investments in India


In case of NRIs, besides, the monetary reasons, emotional connection with their hometown for settling down in the future is also a major factor which drives their real estate investment decisions.

Indian Real Estate holds a lot of promises for good returns on investment.

Trade Between India And US

Trade Between India and US

US goods and services trade with India totaled an estimated $114.8 billion in the year 2016.

FEATURES

  • The partnership provides some more transparent US licensing arrangements for Indian imports of sensitive items and technology.
  • The relation was boosted with the conclusion of an open skies arrangement between two nations in 2005.
  • India US Agricultural Alliance agreed concentrates on promoting teaching, research, service, and commercial linkages.

2016 DATA

EXPORTS

The top exports categories were:

  • Diamonds ( precious metal and stones)
  • Machinery
  • Optical and Medical Instruments
  • Electrical machinery
  • Mineral fuels

The total exports of agricultural products to India was around $ 1.3 billion which is the 21st largest Export market.

Domestic export categories include :

  • Cotton ( $ 250 million)
  • Fresh fruit ( $ 72 million)
  • Planting seeds 9 $ 32 million )
  • Pulses ( $144 million)
  • Tree nuts ($ 522 million)

India was the United State’s 18th largest goods export market.

IMPORTS

The import categories from India were:

  • Pharmaceuticals ( $ 7.4 billion)
  • Mineral fuels ( $ 2.4 billion )
  • Precious metal and stone ( diamonds) ( $ 11 billion )
  • Miscellaneous textile articles ( $ 2.3 billion )
  • Machinery ( $2.1 billion )

Service imports from India is around $ 2.6 billion , $ 2.1 billion  in 2015.

Leading service import categories in 2015 were:

  • Travel
  • Computer
  • Telecommunications
  • Information services
  • Development sectors
  • Research

India was the United State’s 9th largest supplier of goods imports in 2016.

India was the 20th largest supplier of agricultural imports to US.

INVESTMENT

  • United States Foreign Direct Investment (FDI) in India (stock) was $ 28.3 billion in India which is an increase in 4.4 % scientific and tech services, manufacturing and wholesale trade.
  • India’s FDI in US was $9.3 billion in 2015 which is an increase in 37% from 2014.

TRADE

  • US has a service trade deficit of around $ 6.5 billion with India in 2016 which is an increase in 1.5 % from 2015.
  • US goods trade deficit with India was $ 24.3 billion in 2016, an increase of 42 % from 2015.

It is the significant aspect of the global and strategic partnership existing between the two countries.

CONCLUSION

As per the sources, IMF, India’s population was 1.3 billion in 2016 with having its real GDP of around 76% and India GDP (Current market exchange rates) was estimated around $ 2.3 trillion. During goods trade, India was 9th largest goods trading partner.

INDIA’S INTERNATIONAL TRADE RELATIONS

India's International Trade Relations

The magnitude of international trade and commerce by one country with other countries largely determines their international relations. We might have often heard about trade embargos being imposed by a country or a group of countries before they take any other action against the country. Countries have always been heavily reliant on international trade because it is not possible to have all the resources in the country. This was not what India chose to do after independence. In order to save its indigenous economy, it made efforts to shut its doors to international trade hence seriously crippling its economy in the 1990’s. we have come a long way from there to become the fastest growing economy in the world right now with huge contribution by international trade.

India has cordial trade relations with almost every nation in the world barring a few. One thing after the 1990’s that India has excelled in is maintaining peaceful relations with other countries which in turn help foreign trade. India has strong trade allies in the form of USA, UK, UAE, Australia and many more.

India’s economic relations with India are on a high right now. Most of our exports go to the United States. The United States is also the largest investment partner of India with a total of $9 billion investment in the year 2016. The investor community in the US are focusing on several areas like IT, infrastructure, telecom industry, biotechnology and many more. America’s interest in the Indian economy is every growing because of our stable and liberal views while other nations are facing turmoil in the Asian sub-continent.

Another strong ally of India in terms of trade is the United Kingdom. Indian private companies and small enterprises play an important role in the UK economy. In the year 2015 Indian companies in UK generated a revenue of 1billion pounds. The UK also has the third highest FDI inflow in India. Recently commercial deals worth 9.3 billion pounds was announced between several Indian and British companies. UK has shown interest in partnering with India to develop smart cities in Indore, Pune and Amravati.

Canada and India enjoy a healthy trade relation with each other. Though there have been such cordial relations still India and Canada fail to increase their respective shares in each other’s economy. India and Canada are currently holding bilateral talks on the Comprehensive Economic Partnership Agreement (CEPA) which is certain to boost the trade between each other. During the time of East India Company India was one of the first trading partner of Australia. Australia has an education export from India of about $2 billion dollars, as many Indian students are enrolled in Australia. India and Australia have also recognized a strategic research fund amounting to $100 million. Despite such good relations India and Australia have failed to reach a free trade agreement and all circumstance point to no development in the near future.