With the booming investment environment in India, NRI investments have also grown steadily. While India’s investment ecosystem is undoubtedly a lucrative market for NRIs, many fail to consider the time horizon of investment as a key element in formulating a financial strategy. Against this backdrop, NRI-centric investment platform SBNRI recently conducted a survey that revealed the key factors that influence their long-term or short-term investment decisions.
The investment ecosystem in India, with its vast array of investment options (mutual funds, real estate, stocks, etc.), not only provides NRIs with multiple options but also provides a unique opportunity to diversify their investment portfolios.
Key findings of the report;
retirement plan
SBNRI’s survey report shows that 18% of Canadian NRIs focus on retirement planning and developing long-term investment strategies, followed by 16% of British and 12% of Singaporean NRIs. On the other hand, 9% of NRIs in Singapore place a high priority on wealth preservation, compared with only 2% in the UK and 1% in Canada.
Education funding
Furthermore, the report shows that only 4.3% and 1% of NRIs from Canada, the UK and Singapore respectively focus on education funding when making long-term investments.
Mudit Vijayvergiya, Founder, SBNRI said, “India has emerged as an attractive investment destination for NRIs, offering them a range of options and portfolio diversification. However, choosing between long-term or short-term investments can be exhausting , investment immigration is affected by a variety of factors, from geopolitical funneling and risk tolerance to tax implications.”
Positive risk tolerance
In the field of long-term investment, the SBNRI report shows that 8% of Canadian NRIs adopt aggressive risk tolerances, while only 7% of NRIs in the United Kingdom and the United States adopt aggressive risk tolerances. Since then, 4% of UK NRIs have chosen a more conservative risk tolerance, compared with 3% in both Canada and the US.
Furthermore, 5% of NRIs in Canada, the US and the UK choose moderate risk tolerance while formulating long-term investment strategies.
Global factors influence investment decisions
In a fiercely competitive landscape, global economic trends and geopolitical concerns often influence all aspects of the industrial horizon. The SBNRI report is no exception and also shows that 21% of NRIs in Singapore, followed by 15% in Canada and 11% in other countries, are influenced by global economic trends and geopolitical stability when making long-term investment decisions.
In contrast, only a small minority (i.e. 4% in Canada), 3% in Singapore and 2% in other countries do not prioritize geopolitical stability when making long-term investment decisions.
SBNRI’s report turns to the world of short-term investing, exploring immediate liquidity as a major factor affecting short-term investments.
The report shows that only 1% of NRIs in Australia and the UK believe immediate liquidity is a key factor in short-term investment decisions, compared with 3% in the US. However, this number has increased, with 7% of NRIs from the UK and 6% from Australia and the US citing this as an important factor.
Considering the lucrative products that attract NRIs to invest in India, SBNRI’s report brings to light the need to consider tax implications while making investment decisions.
About 13% of Canadian NRIs preferred to view it as an extremely important aspect, followed by 9% and 8% from the United States and other countries. Although only 4% of NRIs are from Canada, followed by 1% from the US and other countries, there is no emphasis on understanding the tax implications of investments.
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