India Property Investment

Overview of India and focus upon the Kerala region, the fastest moving real estate in India.

Around 250 million Indians can be described as middle class, which translates into expanding levels of disposable income a part of which can be spent on higher quality residential property.

India as everyone knows being a BRIC country is demonstrating strong economic growth and the growing middle class are collectively driving a change in cultural norms. There is a move away for the young from living with extended families,to buying their own homes. This translates into a potential shortfall of circa 20 million homes in major cities. In investment terms this possibly equates to Indian real estate values of $300 billion+ for residential development.

For resident Indians or Non Resident Indians purchase of property in India is straight forward and not dissimilar to that in the UK.

Buying is less straight forward than in some countries for foreigners and the following is a brief overview of the requirements.

Foreign Exchange Regulation Act (FERA) is an act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act (FERA) of 1973, It is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose of in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.

Purchase of Immovable Property in India by Foreign Citizens of Non-Indian origin/Foreign Companies
Foreign citizens of Non-Indian origin (whether resident in India or not) and foreign companies including trusts, societies and associations incorporated/ registered abroad will be permitted by Reserve Bank, on application, to acquire immovable property in India, provided the following conditions are satisfied.

The property to be purchased is for residential use only.

The consideration for purchase of the property is met out of foreign exchange remitted from abroad in any convertible currency through normal banking channels

Income accruing by way of rent from the property purchased, or the sale proceeds of such property/income arising out of investment of such sale proceeds at any future date shall be credited only to the Ordinary Non-resident Rupee (NRO) account of the non-resident purchaser.

The level of general foreign investment in India has continued to soar in 2007, rising 65% in the first half of the financial year according to the Indian government. Commerce Minister Kamal Nath said $7.2bn (£3.5bn) was committed to Indian projects in the six months to November.

"Inflows continue with great momentum," Mr Nath said, adding that he expected the economy to grow by 9% in 2007”.

Driven by its booming services sector, India is the world's second largest investment destination after China.

European and US firms have flocked to India in recent years, attracted by its huge domestic market and well-educated and productive workforce.

The telecoms and real estate sectors have seen the most substantial foreign interest. The opportunities for the coming years are clear and transparent to even a casual observer of real estate markets.

Much has been written concerning the growth of real estate in Mumbai (Bombay), New Delhi and Bangalore.

A growing region which is attempting to play catch up is the southern state of Kerala.

Kerala is known as “Gods own country” and it is easy to see why. Travellers for many years have been plying their way through the lush green backwaters on house boats with Coir roofs enjoying the peace and serenity. The people are known for their friendly demeanour and refreshing lack of sophisitication. The region has untouched beaches, lakes, mountains, tea plantations and reserves with one of the largest number of Tigers in India. Only recently has property started to attract the attention of buyers.

Investor Collective is pioneering the way in this corner of India for our clients both European and those part of the Indian diaspora living in the US, UK and European countries as well as resident Indians.

The potential growth is large due to the influx of FDI with companies such as Wipro, Infosys and other large players into business communities such as Smart City and Info Park in Cochin (Kochi). The future is bright and Investor Collective will guide you through this investment paradise.