A recent report indicates that Non-Resident Indians (NRIs) are demonstrating a stronger commitment to long-term investments in India compared to Resident Indians (RIs). The FinEdge report, which analyzed 898 NRI investors across over 90 countries and managing ₹4,200 crore in long-term goals, revealed that over 75% of NRIs have stayed invested for more than five years, with 65% extending this to over seven years. This behavior persists even through periods of significant market volatility, such as the COVID-19 pandemic.

In contrast, approximately 68% of RIs have remained invested for five years or longer, while only 57% have held their investments for over seven years. This data underscores a notable difference in investment discipline between the two groups.

Higher SIP Contributions

The study also highlighted that NRIs are committing larger amounts through Systematic Investment Plans (SIPs). The average monthly SIP contribution from NRI clients at FinEdge is ₹6,486, which is 58% higher than the ₹4,093 average among resident Indian clients. Furthermore, NRI SIPs are more than double the mutual fund industry average of ₹2,900. Resident Indian clients at FinEdge also outperform the industry average, with their SIP contributions being about 41% higher than the ₹2,900 industry norm.

Age and Investment Goals

The majority of investors fall within the 31-45 age group, with 74% of NRIs and 62% of RIs in this bracket, indicating a strong presence of mid-career professionals investing for long-term goals. NRIs tend to start investing slightly later than RIs, possibly due to the time needed to establish careers abroad. Senior participation is higher among RIs, suggesting that more resident investors continue investing into retirement.

Children's education is a top financial priority for NRIs, with 30% of them focused on this goal, targeting an average of ₹82 lakh, compared to ₹52 lakh for resident Indians. Retirement planning is also a key objective, accounting for 27% of NRI goals, with an average target of ₹6.24 crore, significantly higher than the ₹3.64 crore goal of resident Indians. Wealth creation, home purchases, and children's marriage are also strong objectives for NRIs.

Factors Driving NRI Investment

Several factors contribute to the strong investment commitment from NRIs:

• Economic Growth: India's rapidly expanding economy offers robust investment potential, with NRIs viewing India as a land of opportunity and long-term growth.
• Diversification: Long-term investment in India allows NRIs to diversify their portfolio beyond their host country, reducing risk and enhancing potential returns.
• Emotional Ties: NRIs often have strong emotional ties to their home country, driving their desire to invest and contribute to India's growth.
• Favorable Regulatory Environment: The Indian government has taken steps to ease regulations and improve the ease of doing business, creating a more investment-friendly environment for NRIs.
• Technological Advancements: Virtual reality tours, online transactions, and streamlined processes make investing in Indian real estate a remote, hassle-free experience for NRIs.

Investment Options for NRIs

NRIs have various investment opportunities in India, including:

• Bank Accounts: NRE, NRO, and FCNR accounts offer different features for managing funds.
• Stock Markets: NRIs can invest in Indian stock markets through the Portfolio Investment Scheme (PIS).
• Mutual Funds: A popular investment option for NRIs.
• Real Estate: Offers a diverse range of options, from residential properties to commercial spaces.
• Fixed Deposits: A safe investment avenue for risk-averse NRIs.

Impact on Indian Real Estate

The growing interest of NRIs is significantly impacting the Indian property market. NRIs are turning into active participants who are redefining the parameters of housing and construction in India. This influx of NRI capital is pushing developers to incorporate smart technology, wellness areas, and enhanced transparency, ultimately elevating the quality of housing for all buyers.

Conclusion

The FinEdge study highlights the disciplined, goal-focused investment approach of NRIs. Their higher SIP contributions, longer investment horizons, and ambitious targets for key life goals suggest a strong financial acumen and commitment to securing their future. As India's economy continues to grow, NRIs are expected to play an increasingly significant role in shaping its future.