Why Invest in INDIA ?

Creating Opportunities for Non-Resident Indians (NRIs)

Introduction

India has positioned itself as one of the world's fastest-growing economies. With a flourishing economy and a substantial population, India is now attracting investments in various sectors from all around the globe. This presentation aims to elucidate the factors contributing to India's appeal as a favored destination for global investments.


Robust Economic Growth

India has consistently demonstrated strong economic growth, with a projected 6.5% growth in 2024 and 2025 which significantly exceeds most of the major economies in the world. This growth is supported by robust domestic demand and significant expansion in the manufacturing and services sectors.


Demographic Dividend 

India boasts the largest youth population globally, with over 66% of its total population under the age of 35. This demographic dividend presents significant opportunities, as the Indian labour force is expected to grow by over 8 million annually in the coming decade.


Digital Transformation

The digital economy in India has experienced remarkable growth, accounting for 10% of the total economy in 2023. Expected to reach nearly 20% of India's GDP by 2026, this surge reflects the widespread digitalization in government and the broader ecosystem. Opportunities abound in the thr class="ind-hr"iving startup ecosystem and the technology sector.


Government Reforms

The Indian government is actively spearheading initiatives such as Ease of Doing Business and Reducing Compliance Burden. These efforts aim to create a conducive business environment for all sectors, including startups. Key focus areas include simplification of procedures, digitization, and decriminalization, with specific measures tailored for the startup ecosystem.

Here are examples of a few examples of top reforms for the startup ecosystem:

  • Startup enterprises are permitted to access loans under the External Commercial Borrowing Framework up to USD 3 million
  • The lock-in period for investments made by an Angel Fund is reduced to 1 year.
  • Angel Funds are allowed to invest in overseas venture capital undertakings up to 25% of their investible corpus.
  • The upper limit for the number of angel investors in a scheme increased from forty-nine to two hundred.
  • Eligible startups are exempted from tax on the issue of shares above fair market value.
  • Startup enterprises are permitted to access loans under the External Commercial Borrowing Framework up to USD 3 million
  • The lock-in period for investments made by an Angel Fund is reduced to 1 year.
  • Angel Funds are allowed to invest in overseas venture capital undertakings up to 25% of their investible corpus.
  • The upper limit for the number of angel investors in a scheme increased from forty-nine to two hundred.
  • Eligible startups are exempted from tax on the issue of shares above fair market value.

Stable Political Environment

India's political stability is grounded in its robust democratic system, maintained since gaining independence in 1947. Operating within a multi-party political framework, India ensures diverse representation, fostering stability through coalition building. The constitutional framework and independent judiciary further contribute to a stable political environment..

Here are examples of a few examples of top reforms for the startup ecosystem:

Democratic Governance

India operates under a robust democratic system, with regular elections at the national, state, and local levels. The democratic structure promotes stability by ensuring a peaceful and orderly transition of power.

Policy Continuity

The country's commitment to economic reforms and continuity in policy frameworks, regardless of changes in government, provides a stable environment for businesses and investors. Policies favoring economic growth have been a consistent focus.

Political Stability

India has a history of political stability, with stable governments at the center contributing to a predictable policy environment. This stability is conducive to long-term economic planning and development.

Rule of Law

India has a well-established legal system that upholds the rule of law. The judiciary plays a crucial role in safeguarding individual and business rights, contributing to a stable and predictable legal and regulatory environment.


Financial Stock market performance

The Indian stock markets exhibit noteworthy performance, offering substantial potential for capital appreciation when compared to global counterparts.


Evolution of Wealth Creation: 2000-2024


Diversification & Risk management

  • Engaging in investments in India presents NRIs with the opportunity to diversify their investment portfolios across different geographical regions.
  • This diversification offers enhanced stability to the financial portfolios of NRI investors, enabling them to navigate market volatility and economic downturns with greater resilience.
  • By opting for investments in Mutual Funds or ETFs, NRI investors can strategically diversify their portfolios, spreading investments across various sectors and asset classes.
  • India, being an emerging market, holds the potential to yield superior long-term returns compared to developed markets. Investing in India contributes to an overall stability in the portfolio, making it a valuable addition for NRI investors seeking a balanced and resilient investment strategy

Taxation

Double Taxation Avoidance Agreements (DTAA):

NRIs can benefit from DTAA agreements between India and many other countries, which help prevent the taxation of the same income in both India and the NRI's country of residence

Basic Tax Exemption Limit:

As a Non-resident, NRI gets the benefit of the basic exemption limit of ₹ 2,50,000 from total income. However, if total income in India consists of only short-term capital gains or long-term capital gains, then the benefit of the basic exemption limit is not available with respect to such gains.

Exempted Income:

Interest earned on Non-Resident External (NRE) Accounts and Foreign Currency Non-Resident (FCNR). Any sum received (Including bonus) under the life insurance policy upon maturity of the policy, pre-mature withdrawal provided policy issued after April 1, 2012, the yearly premium does not exceed 10% of the sum assured.

Tax Deductions on Investments:

NRIs can avail tax deductions on certain investments in India, similar to resident taxpayers. Investments in instruments like Equity-Linked Savings Schemes (ELSS) and the National Pension System (NPS) may offer tax benefits.


Conclusion

In conclusion, India presents a compelling investment destination for NRIs, offering a unique blend of economic growth, demographic potential, technological advancements, and a favorable policy environment. Diverse investment opportunities await those willing to explore and participate in India's dynamic and thriving economy.

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