New report reveals incredible facts about NRI wealth

This post was originally published on 7 May 2016 and the content may be outdated.

India’s strong economic growth and depreciation of the rupee remain major driving forces of increased investment from overseas Indians in the country, finds a new report by WealthInsight.

India’s economy has overtaken China’s to become the world’s fastest-growing major economy in late 2015. The economy grew by 7.3% in the last three months of the year compared to China’s 6.8% during the same period.

2.36 lakh NRIs are millionaires

The number of NRIs who held millionaire status last year was 2.36 lakh, with an average wealth of over $3.83 million.

  • The total NRI population was pegged at around 2.84 crore.

An Indian national who is away from India for more than 180 days per year is considered an NRI for tax and other official purposes by the Indian government.

US, UK has largest proportion of NRI millionaires

As expected, the US accounted for the largest proportion of NRI millionaires with a total of 133,564, or a 56.5 per cent share, followed by the UK with a 12.7 per cent share.

Other major countries with a significant number of NRI millionaires include the UAE, Canada, Hong Kong, Singapore, Indonesia and Japan, the report said.

Total NRI wealth $915 billion

The total wealth of NRI millionaires was estimated at around $915 billion in 2015 and is expected to reach $1.4 trillion by 2019, the report said.

India’s strong economic growth and depreciation of the rupee have been key driving forces of increased investment from overseas Indians in the country, the report said.

Depreciation of the rupee increases NRI investment

The value of the rupee against the US dollar depreciated from INR53.01 in December 2011 to INR66.20 in December 2015.

This has created an attractive opportunity for NRI investors looking to invest and remit funds to India.

The key sectors in which NRIs are expected to increase investments include realty and healthcare. The overall Indian healthcare market was worth US$100 billion in 2015, and is expected to grow to US$280 billion by 2020.

US$72 billion NRI remittance in 2015

According to WealthInsight research, the value of inward NRI remittances rose from US$62.49 billion in 2011 to US$72.17 billion in 2015, registering a review-period CAGR of 2.9%.

  • Asia accounted for 67.47% of remittances sent to India, followed by North America with a 19.88% share, Europe with 8.22%, and Oceania with 3.07%.

The remaining remittances were contributed by Africa with 0.84%, and Latin America and the Caribbean with 0.52%. As well as family needs, remittances are most often used for investments in stocks, term deposits, and land and property.

Dr Roselyn Lekdee, Economist at WealthInsight comments: “Most of the NRI millionaires are self-made entrepreneurs who still have strong connection with their home country. According to the World Bank, India was the world’s largest recipient of remittances in 2015, largely from the Gulf countries.”

“While global economic uncertainties continue to hamper the Indian economy, depreciation of the rupee could provide opportunities for the NRI millionaires to develop stronger ties with their home origin,” Dr Lekdee added.

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