Incentives for NRIs to look beyond realty to stocks

NEW DELHI: Even though India is the world’s top remittance recipient,

NRI

investment in Indian capital markets is puny. The merger of NRI portfolio route with the foreign portfolio investment (FPI) will help funnel more money into Indian paper.


NRIs prefer to invest heavily in real estate compared with

stocks

. Huge paper work and follow ups act as deterrents. H R Khan Committee, formed to look into this matter, recommended the merger of the two.

“World wide ETF’s are gaining popularity, so NRIs investing in it through FPI will make the investment process

seamless

and it will bring more money to the India market through index funds. Although the quality of stocks and availability were always an issue with FPI, index fund will solve the complexity to a greater extent,” said Suresh Parthasarathy, founder, Myassetconsolidation.com

This, coupled with removal of 24% statutory limits for FPIs and match it with sectoral limits, will ensure greater NRI participation.

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