Should Non-Resident Indians invest in Commercial Properties in India?

• @kw
• 30 Sep 2020

It has always been a priority for a non-resident Indian to invest on properties in their own country. The liberalization and relaxations allowed by government encouraged NRIs to gradually increase their investment over the last few years in the commercial realty sector. Opening up of FDI ( Foreign Direct Investment ) route for entering retail brands, escalation of urbanization and the strong economic fundamentals is favoring investment by NRIs in commercial properties in India. In the recent years the introduction of RERA has brought more confidence by exhibiting transparency and accountability in real estate sector.

Another interesting fact for NRI investor to take more interest in commercial sector is due to its higher rental yield compared to a residential property. On an average the annual renal is 6 % – 8% for a commercial property compared to 1.5 % to 2.5 % on residential property depending upon the property location. NRIs are more interested to earn a secure return on  their investments which is leased for a long time and maintaining it is the lessees prerogative. And further the commercial property sector in India is more organized as it is mostly in the hands of big and reputed builders. KW Group Pvt Ltd. is one such Developers who have their Commercial projects like KW Delhi-6 in Ghaziabad, KW Blue Pearl in Delhi and the group has a very specialized people to handle leasing documents and make sure that the NRI investor get all the facilities for the smooth transaction.

NRI is a preferred customer for a bank to avail loan for purchasing residential or Commercial properties in India. They can also claim tax benefit under section 24 and Section 80a of the Income Tax Act. Bank verifies all papers of the property title, background of the builder etc. This is also a nice way to get the property properly vetted against a small fees. NRI contributions to the Indian GDP stood at 3.4% in 2018. Each NRI money transfer adds to the country's foreign exchange pool.