A nation’s growth is not merely dependent on robust domestic demand but also on an international destination for investors to park their money. The post-1991 scenario of liberalization emphasizes the open market scenario. Ever since, the country has gone through tremendous change to balance its trade deficit. For several decades, the Indian economy has gained importance and has been resilient to global change. However, it would be impractical to attribute this growth and success to the strong domestic market alone. Various research data shows a strong inflow from international investors. The Indian diaspora and FIIs are two major drivers driving the nation towards success. Most importantly, a positive trend and outlook have been observed in NRI investment in real estateto buy property in India. In this blog post, we will try to chart the reasons and prospects for this trend.

A growth bubble or achievement:

Had it been said decades ago, the significance would have been different. But now it is altogether different. Cyrus Mody, the founder and CEO of Viceroy Properties, quoted this term almost a couple of months ago, highlighting the Indian real estate investment trend, primarily focusing on NRI. However, Indian real estate has much more to offer and comes with various economic benefits that support the growth of this sector. A thorough analysis of the sector helps us to understand how global upheaval paved the way for the success of India. According to a recent research report by luxury sanitaryware company GROHE, Indian real estate companies outpaced China for the first time. The fall of the biggest real estate company, Evergrande of China, shows the rift-led economic crisis over political strictness. The number plummeted from 100 to 30, which clearly shows the sectoral impact on the entire nation. Similarly, western economies are also facing a tough time. The downturn in the manufacturing sector is due to poor demand, rising inflation, and a high interest rate, making it worse. As a result, investors find India a better place to invest.

What makes NRIs Gaga over India?

Barring the preset narrative of emotional bonding and ethnicity connecting, several factors account for the growth of the Indian economy. However, a preoccupied notion tags it with social and emotional bonding, which is true to some extent. Most importantly, the meager groups and communities in a foreign nation have a weaker interest in their ethnicity. There are the following things that prompt them to invest in India:

• Higher returns:- From war-ridden nations to economic slowdowns, when most of the nations are facing a tough time, a downfall in industrial output is observed. Most importantly, the downturn of IIP in such economies is a major challenge to address. However, the Ministry of Statistics and Programme Implementation report data shows 3.8% growth in January 2024 (details are mentioned below). It is worth noting that China’s downturn in IIP was led by poor infrastructure facilities due to a stringent political regime. The US, UK, and other Western economies experienced it because of low domestic demand and inflation.


Various government initiatives, policy amendments, a rising number of affluent people, greater disposable income, and strong demand due to geographical dividends paved the Indian real estate sector’s way to growth. According to KPMG India and the National Real Estate Development Council (NAREDCO) report, the market size of Indian real estate is expected to grow from $200 billion in FY21 to $1 trillion by 2025. Privana South, a project of DLF, had achieved Rs. 1800 crore through NRI sales, which accounts for 25% of the NRI investment portfolio. During 2023–24, the sales from NRI investors surpassed Rs. 3400 crore for DLF, which accounts for 20% of the total sales of the company.

• Sense of Safety and Security: A widely known fact is that an astute professional investor wishes to park his money in a market or portfolio where he can enjoy the maximum return with low risk. According to the founder and chief business officer, Saurabh Garg, of NoBroker.com, during 2019–20, it was estimated that approximately 10% of the investment was made by NRI; however, it experienced phenomenal growth in the subsequent years. According to Amar Sarin, the MD and CEO of TARC Ltd., NRI, this accounts for nearly 20% of its growth. Moreover, India is considered a second home to these investors, and they prefer it to mitigate personal and financial risk in times of need. The investment growth pattern also indicates that their endurance connection grows stronger as it offers a highly secure environment and affiliation to their knowns.
• Augmented currency parity: This is yet another big reason for investment in India. In comparison to currency rate fluctuations, NRIs and foreign investors enjoy greater purchasing power parity when investing in India. It gives them dual advantages, as they get the better purchasing option at a relatively lower investment cost. Secondly, if you add the inflation and interest rate matrix to it, the picture gets clearer. Stable economic conditions, positive indices, and demand fan this momentum for longer, which is why investing in India is a better idea than any other country.
• Regulatory measures: In the past couple of months, evidently radical changes in policy initiatives have propelled the growth of the Indian real estate sector. Giving more teeth to regulatory authorities and procedures such as RERA approval, normalizing SEBI guidelines for REIT, the growing importance of fractional investment, digital investment platforms, crowdfunding, and technical amalgamation are certain crucial changes that shaped this sector, created transparency and made monitoring an easy task to manage. As a result, investors and home buyers feel a sense of safety and security while investing in this sector.
• Economic Growth: Undoubtedly, the return on investment is subject to economic growth. As per the United Nations Report, falling household savings, a high interest rate, and the poor performance of the labor market are the prominent reasons for the lower GDP growth of the American economy. Similarly, high inflation and interest rates haunt Europe, the downturn of exports and tighter financial conditions in Latin America, the climate crisis, and geopolitical instability in Africa. Political tension, lower domestic demand, and various other concerns led China to experience poor industrial output and international pressure, due to which the GDP took a downturn. On the contrary, strong domestic demand, growth in manufacturing demand, and a stable government led India’s growth to a new trajectory.

Conclusion: The Indian real estate sector is experiencing new growth. With strong domestic demand, resilience to global market fluctuations, economic stability, and much more, this sector is a prominent investment destination for investors across the globe. However, a significant transition in investment shows that NRI investment in real estate is gaining importance. During 2023–28, the Indian real luxury estate market is expected to reach a CAGR of more than 5%. Most importantly, the infusion of $13.1 billion by the NRI investor last year shows the growth and trust among them to park their investment in the country. They contribute nearly 13% of the country's GDP. By the year 2025, NRI investment is expected to account for 20% of the total real estate market in India. In such a case, it is imperative to understand that Indian real estate is escalating to new heights, and the momentum will continue in the future.

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