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RBI clarifies on FDI

The Reserve Bank of India has clarified that in terms of the regulations framed under FEMA, 1999, an Indian company receiving FDI does not require any prior approval of the Reserve Bank of India at any stage. It is only required to report the capital inflow and subsequently the issue of shares to the Reserve Bank in prescribed formats.

It may be noted that, FDI in India can be made through two routes, namely, the automatic route, where no prior approval from any authority is needed for an Indian company to receive FDI and the approval route, where the company receiving FDI requires prior approval of the Foreign Investment Promotion Board (FIPB). FDI under both the routes is subject to FDI policy and the conditions laid down in the relevant Regulations framed under FEMA.

NRI Investment made simpler

The government has approved a proposal allowing investment made by NRIs to be deemed as domestic investment on par with resident investments. The Union Cabinet also approved the proposal that NRI includes OCI cardholders as well as PIO cardholders.

The government decided to amend the FDI policy to incorporate the definition of NRI as an individual resident outside India who is a citizen of India or is an ‘OCI cardholder within the meaning of Section 7(A) of Citizenship Act, 1955. PIO cardholders registered as such under a notification issued by the centre are deemed to be ‘OCI cardholders’. All this will enable investments by NRIs, Overseas Citizen of India (OCI) and Persons of Indian Origin (PIO) cardholders under Schedule 4 on non-repatriation basis, across sectors, without being subjected to the conditions associated with foreign investment.

LIC Housing Finance’s new schemes

Housing finance company LIC Housing Finance ( LICHFL) has recently launched two new home loan schemes -- Bhagyalaxmi Plus and New Fixed 10.

Under Bhagyalaxmi Plus scheme, home loans will be given to those women who will be the sole owner or first owner to buy a property, at a fixed rate of interest of 10.35 per cent for loans up to Rs 75 lakh for the first two years, and floating rate thereafter, according to company sources.Moreover, borrowers would get a discount of 0.25 per cent throughout the loan term on conversion to floating rates.

The 'New Fixed 10' scheme comes with fixed interest rates for 10 years, out of which first five years would carry a rate of 11.50 per cent, for loans up to Rs 75 lakh. The scheme offers customers the flexibility to exercise an option after five years to convert their loan into floating rates prevalent at that time.

Surge in NRI Demand

Stability in housing prices and favourable rupee movements are bringing back the NRIs in a big way to the real estate market, according to HDFC sources.

To tap their interest, HDFC as also a number of property developers are undertaking special marketing campaigns including by way of organising property fairs in places with high NRI population such as the US and the UK.

Interestingly, the non-resident Indians living abroad are showing a renewed interest in the Indian housing market at a time when the local demand is relatively sluggish. Stable prices, bargain offers, availability of property management services and easing of investment norms are cited as reasons for the surge in NRI demand.

Home Loan to become cheaper

With the RBI reducing the repo rate by 25 basis points to 7.25 per cent, housing finance companies and banks are likely to reduce the home loan lending rates in the coming weeks. SBI took the lead to cut its base rate by 0.15 per cent and its revised base rate would be 9.70 per cent. A reduction in 0.25 per cent lending rate for a Rs 1 crore home loan would make EMI cheaper by Rs1,650-1700 with a cumulative interest savings potential of about Rs 4 lakh for a loan with 20 year repayment period.

NRI market in Qatar hit due to localisation drive

An estimated 500,000 NRIs are living in Qatar. Regular Indian property shows and road shows were held to market housing projects across expatriate Indians and the response has so far been quite encouraging. However, the Qatarisation drive initiated by the government has impacted the NRI demand towards investment in Indian real estate.

The local government is on a localisation drive of inducting workforce in the private sector with the result 30 per cent of workforce, predominantly of Indian origin, have recently been laid off. This has slowed down the overall tempo of investment in housing as Indian expatriates prefer to wait and watch the trend before investing their savings, said Sudhan Sundaram, Director, Propshell Business Solutions Pvt Ltd.

Investing in the right place (Hot & Happening Destinations)

Land is one of the best places to invest your hard-earned money in. The money invested on land keeps growing every year and gives you profitable returns whenever you want to sell it. But you should also know when and where to invest. Investing in the right piece of land at the right place for example, a prime developing area or a place that's poised to be the next happening zone is very important. This is where the expertise and experience of ABI will guide you. We have exclusive properties in prime locations that are best long-term investment options.

Investment destination: India

In recent times, India has emerged as one of the popular real estate destinations for the global investors. According to the consultant Cushman and Wakefield, “Investment in Indian real estate was over US $ 5 billion in the year 2014.”

Real estate is one of the booming industries in the country and your investment will surely flourish in the next five years. It is all set to scale new heights with the emergence of fresh localities in tier one and two cities. Apart from financial opportunities, a home at your own homeland provides a sense of security and supports you and your family emotionally.

ABI understands your concerns and apprehensions. That’s why it provides quality construction, homes at strategic locations and maintains a complete transparency in every transaction.

The future of investment: Real Estate

India is the world’s fourth largest economy and it has emerged as the most sought after destination for global business. The favourable socio-economic profile and government initiatives have given a new boost to the Indian realty sector. According to the United Nations estimate,India leads in the rate of change of urban population amongst all the BRIC nations (Brazil, Russia, India and China).

Great investment opportunities: ABI Homes

Popular Location: ABI homes are strategically located

Higher Appreciation: ABI one amongst the top four brands on a national platform across asset class and a no.1 brand in the residential segment across India. It’s committed to deliver quality homes on a scheduled time. Consequently, ABI appreciate much faster than the rest and offer a great investment opportunity for you. Quality Homes: ABI is dedicated to maintain high quality standards and transparency in every sphere of business. “Home Truth Demo” is one of its unique initiatives to empower its patrons about the crucial mechanism and components that go in building a home. When you go for ABI you are sure of its quality. Rental Assurance: Strategically located and thoughtfully designed ABI with world-class amenities provide you rental assurance, an added source of income from your investment.

Trusted Brand: ABI is highly regarded for its transparency, fair play, integrity and honesty. The company has maintained the highest standards in quality, protection of environment against pollution, health and safety of its employee. Your investments are in safe hands when you own ABI Plots.


Who is a Non Resident Indian (NRI)?t

According to the Foreign Exchange Management Act (FEMA) of 1999, an Indian Citizen who stays abroad for employment/business or stays outside the country for an indefinite period of time is considered to be an NRI. (Persons Posted in U.N. organisations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as nonresidents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs)

Who is a Person of Indian Origin (PIO)?

PIO is a person of Indian origin whose ancestors were born in India and he/she has an Indian ancestry but not an Indian citizenship. As per the FEMA of 1999, a person of Indian origin can avail bank accounts, invest in shares and securities in India. So, he or she

  • has had Indian Passport at any time
  • himself/herself, parents or grandparents were Indian citizens (of the Constitution of India or Citizenship Act, 1955 (57 of 1955)
  • is a spouse of an Indian citizen or a person who held an Indian Passport at any time
  • is a spouse of a person who either was a citizen of India or his parents or grandparents were a citizen of India

Can an NRI/ Foreign national acquire immovable residential property in India?

According to the RBI guide lines, an NRI/PIO can acquire a residential property in India by a way of gift from an Indian, NRI/PIO or purchase it. He or she can even acquire residential property by way of inheritance from a person who is a resident of India as per the Provisions of Section 6(5) of the FEMA, 1999.

Do NRIs/ Foreign citizens of India need to submit any documents with RBI when purchasing immovable residential property in India?

When NRIs/PIOs purchase an immovable residential property under general permission they are not required to file any documents with the Reserve Bank of India.

Are there any restrictions on the number of residential property that an NRI/PIO can purchase?

No, there aren’t any restrictions.

Can an NRI transfer his residential property by way of sale?

An NRI can sell his or her property in India to an Indian resident/ NRI / PIO.

Can a PIO transfer his residential property by way of sale?

Under general permission a PIO can sell his or her residential property in India to an Indian citizen only.

Can an NRI/PIO transfer his residential property by way of gift?

Yes. An NRI/PIO can transfer their residential property in India by way of a gift to an Indian resident/NRI/PIO.

What mode of payment can an NRI/PIO make to purchase a residential property in India?

Under the general permission, an NRI/PIO may purchase a residential property in India by funds remitted to India through normal banking channel or funds held in his/her NRE/FCNR (B)NRO accounts. No consideration shall be paid outside India.

Can NRIs obtain loans for acquisition of a house /flat for residential purpose from authorised dealers/ financial institutions providing housing finance?

Reserve Bank of India has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc. and authorised dealers to grant housing loans to NRIs for acquiring a house/flat for personal use but subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period of 15 years out of inward remittances or out of funds held in the investors' NRE/FCNR/NRO accounts.

What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?

NRIs and PIOs are required to file a declaration in a form IPI 7 with the Central Office of Reserve Bank at Mumbai (within a period of 90 days) from the date of purchase of the property or final payment of the purchase consideration along with a certified copy of the document which would be an evidence of the transaction and bank certificate regarding the consideration paid.

Can an NRI give their residential property on rent if not required for immediate use?

Reserve Bank of India has permitted NRIs to let out any immovable property in India on rent. The rental income or proceeds of any investment of such income are eligible for repatriation.

Can NRIs / PIOs repatriate outside India the sale proceeds of immovable property held in India?

(a) When an NRI/PIO sells an immovable property other than agricultural land / farm house / plantation property, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are followed:

(i) The immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these regulations.

(ii) The amount to be repatriated does not exceed:

  • The amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels
  • The amount paid out of funds held in Foreign Currency Non-Resident Account
  • The foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property

In the case of a residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

Repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency. Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account?

In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account. NRI/PIO are also allowed by the authorised dealers to repatriate an amount up to $(US) 1 million per financial year out of the balance in the NRO account / sale proceeds of assets through purchase / the assets in India acquired by him through inheritance / legacy. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 in any financial year requires prior permission of the Reserve Bank.

A person referred to in sub-section (5) of Section 6 of the Foreign Exchange Management Act 3[3] [3], or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section.

Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account?

India is one of the most attractive real estate investment destinations, especially for the Non Resident Indian (NRI) popula¬tion. According to a report by Square Yards, a real estate investment advisory firm, the total NRI investment in primary Indian real estate in top 8 major cities is expected to reach around USD 11.5 billion in 2017. Thanks to the progressive regulatory reforms and ease of NRI investment process in India, the NRI investment sentiments have improved considerably.

While market scenario is favourvable for a real estate purchase, it is advisable for NRIs to understand the prevailing policies, reforms and laws governing their investment. To help them with the process, we have listed below some of the key laws that one should keep in mind:


Ease of Buying

RBI has eased the rules of owning a property by NRIs under the Foreign Exchange Management Act (FEMA). As opposed to earlier, they are no longer required to go through an approval process with Foreign Investment Paper Board. Now, buying a property in the country is an Indian passport away.

Property Type

An NRI can purchase both residential and commercial properties in India. What’s more, there is no cap on the number of properties that an NRI can buy in India. However, they are not allowed to buy any agricultural land, farm house or plantations. These can be owned only if it is inherited or given as a gift.

Power of Attorney

Now, physical presence of an NRI is not mandatory for making a real estate transactions. A power of attorney (POA) is only required to simplify the investment procedure. In case of an under-construction property, a developer may require you to give POA that authorizes them for ease of documentation. Alternatively, NRIs can issue a POA to a relative or a known Indian resident for executing all real estate dealings on your behalf, including registration, sale etc.

Now, physical presence of an NRI is not mandatory for making a real estate transactions. A power of attorney (POA) is only required to simplify the investment procedure. In case of an under-construction property, a developer may require you to give POA that authorizes them for ease of documentation. Alternatively, NRIs can issue a POA to a relative or a known Indian resident for executing all real estate dealings on your behalf, including registration, sale etc. However, care should be taken to get the POA vetted or prepared by a legal expert to avoid any misuse.


To secure funding for real estate transactions in India, an NRI must ensure all the paperwork is up to date, proper and in line with the laws. Additionally, NRIs must have an account with an authorised Indian bank and must be make all the transactions in Indian rupees.

Several financial institutions in India offer various home loan schemes for NRIs. As per the norms laid down by RBI for securing funding, NRIs must ensure that at least 20 percent of the value of the property comes from personal resources and the remaining 80 percent can be financed through a bank or other financial institution.

Besides this, one must keep in mind that these dealings have to be executed through Indian banking channel using NRO/NRE account for inward remittances. Alternatively, one can also opt for post-dated cheques or ECS from the NRE, NRO or Foreign Currency Non Resident (FCNR) account for the transaction.


A NRI can sell any of his/her property – commercial or residential – to anyone. Somewhat similar to buying laws, while selling an agricultural land, farm house or plantations, NRIs have to ensure that the buyer is an Indian resident or they can gift it to anyone, including an NRI.

Tax Benefits

When buying a home in India, NRIs are entitled to tax benefits that are similar to the ones enjoyed by the citizens. They can claim up to INR 1 lakh of deduction under Section 80C of the Income Tax Act, 1961. Similarly, NRIs are eligible for deduction on stamp duty, registration, municipal taxes, and a 30% deduction on rent. These are some of the benefits enjoyed by a resident as well. NRIs, however, have to pay TDS for a property over INR 50 lakh at 1 %. A capital gain tax is also levied while selling the property.

As one of the fastest-growing economies, now is the time for NRIs to invest in the Indian real estate market, especially with favourable laws, tax benefits and plethora of options to choose from. At ABI offering ranges from apartments, row houses, villas to plotted developments to suit the needs of each customer.

To help you make the right investment choice, connect with us today!