Passage to India

After decades of emigrating out of India to find economic opportunities in other countries, a surprising reversal is taking place. People of Indian Origin (PIOs) and Non-Resident Indians (NRIs) are buying land and in some cases moving back to their homeland.

Indians who have spent much of their lives as expatriates are contemplating returning to India for their later years. As a step in that process, many are investing in second homes which will serve as rental properties until they retire. Others plan to expand their businesses to India. They are buying commercial property to generate lease revenue, planning to make it a landing spot for their business when they’re ready to make the leap.

It’s not only older well-established emigrants making the move. Young highly-educated Indian-Americans, many of them children of immigrants and eager to be entrepreneurs, are looking for ways to take part in the vibrant Indian economy. To do so, they plan to leverage their knowledge and family networks. Some call it a reverse flow of the brain drain. Still other young Indian-Americans are pooling their funds to invest in property as a way of connecting to the motherland.

A Special Relationship

Non-Resident Indians have traditionally had an important role in Indian society. They left India to improve not only their lives but the fortunes of extended families left behind by sending a substantial part of their earnings home. Their remittances are significant sources of funds for education, health care and small businesses.

According to the World Bank, remittances from expatriate Indians worldwide topped $63 billion in 2011 and were the greatest of any country in the world, constituting 3.0 percent of India’s GDP. While FDI and private equity investments in India have declined from 2008, remittances continue to grow at a rate of over 5 percent annually. It’s important to note that non-residents and citizens of other countries cannot buy land in India, except under special circumstances. Further complicating matters, India does not recognize dual citizenship. If an Indian becomes a U.S. citizen, they are no longer an Indian citizen.

Then how can Indian Americans buy land in India? India recognizes the importance of expatriates and Indian descendants by giving them special status in Indian society. Once a non-resident of Indian descent has applied for and received NRI or PIO status, they can purchase residential and commercial property, but not agricultural land.

Why Now?

Several factors make this a good time for nonresident Indians to pursue their dreams of owning property in India. The economic boom, infrastructure improvements, and growth of the middle class over the last decade have made them believe they can now live the good life in India. Further:

  • The rupee has declined dramatically against the U.S. dollar.
  • It’s a buyer’s market. In some areas developers have overbuilt and prices have fallen to reflect the glut.
  • Loans are now available to NRIs for up to 80 percent of the property’s cost through specific types of bank accounts.

Property Preferences

Residential property is popular because many Non-Resident Indians are looking for second homes they can use later in retirement. Developers are targeting them by building NRI colonies tailored to the lifestyle expectations of returning expatriates. Amenities include pools, clubhouses, private gyms, and children’s pools and play yards. In some areas, ultra-premium residential projects are underway.

On the commercial side, desirable properties include front office, IT office and high street retail space. The top cities for commercial investment are Mumbai and Pune in the west, Delhi and the National Capital Area (NCR) in the north, and Bangalore, Chennai and Hyderabad in the south. For the last few months commercial prices have been declining due to high vacancy rates and the cash needs of over-leveraged developers. In India, loan rates are high and material costs are rising. Many real estate professionals believe properties now may be undervalued by as much as 15 to 30 percent.

Market Challenges

Investors who are used to the mature real estate industry practices of the West may be surprised by the frontier-like style of the market in India. If you have nonresident buyers looking for properties there, prepare them for potential challenges.

India’s real estate industry is not well regulated. Developers in particular differ greatly in terms of ethics. Buyers may experience widespread delays, requests for additional cash and delivery of substandard construction.

Agents are also unregulated and many have little or no formal education in the real estate market. The NAR-India organization is attempting to address these issues in its fledgling national association, which is newer and modeled after the National Association of REALTORS® in the U.S. It is working to strengthen the national body with an enhanced value proposition for its 20 local associations. U.S.-based franchises are also beginning to take shape in India and will further professionalize the industry, notably RE/MAX India, which in only three years has become India’s largest real estate brokerage network and RE/MAX International’s fastest growing region with over 100 offices.

State governments and the Confederation of Real Estate Developers’ Association (CREDAI) are trying to improve industry standards. Proposed legislation would register and accredit builders, establish escrow requirements, enforce compliance with building codes, and increase efficiency and overall market transparency.

There are other hurdles as well. India does not have a standardized MLS and listings are not exclusive, though change is underway. Pricing and comparable properties are hard to find. For those buying from abroad, exchange rates have been extremely volatile recently. Additionally, buyers living elsewhere will find few good property management firms. Traditionally, absentee landlords rely on local family to collect rent and solve property issues.

Making the Right Connections

Even with these barriers, there are still many Indian expatriates who are interested in investing in India. To assist them you’ll need relationships with Indian real estate professionals.

A good way to network is to attend NAR-India’s Annual Convention, held in Mumbai this year, but the location changes each year. There you’ll meet India’s top real estate professionals and developers as well as private investors, venture capital and private equity firms and legal and tax experts. (Go to for more details.) You will soon be able to connect with Indian agents through their listings on

Other Considerations

Finding and working with reputable real estate professionals will go a long way towards improving your buyers’ experience. Some other advice to pass along to buyers:

  • Check for title registration. Look for prior claims, liens and encumbrances. There are no title companies to do it for you.
  • Find builders with a strong track record. By dealing with reputable developers there’s less chance of construction problems and more opportunity for long-term appreciation.
  • An Indian bank account is required for nonresident buyers. Visit The Reserve Bank of India at for more information.
  • Taxes can be high, depending where the property is located. Anticipate a four to ten percent stamp tax, registration fees, property taxes, and real estate agent fees of one to two percent plus 10.2 percent VAT.

A Two-Way Street

The Indian Diaspora creates opportunities for global sales on either side of the Pacific. Talk to Indian expats in your market about their dreams of owning property in their mother country. You may be able to help them make that purchase.

Two Classifications for Overseas Indian Citizens

  1. Non-Resident Indian. An Indian citizen who resides outside of India.
  2. Person of Indian Origin. A foreign citizen whose parents, grandparents, or great grandparents were Indian citizens may apply for PIO status and may also apply for Indian citizenship after seven years residence.

Both NRIs and PIOs may:

  • Travel to India without a visa
  • Maintain a bank account in rupees or foreign currency
  • Own residential and commercial real estate
  • Sell agricultural land but not purchase it
  • Repatriate property sale proceeds for up to two properties

Four Ways to Connect with REALTORS® in India

  1. Meet, network and learn at NAR-India’s Annual Convention. Visit for more information.
  2. Find Indian Accredited Buyers Representatives® (ABR®s) at
  3. Connect with International REALTOR® Members (IRMs) by visiting
  4. At the REALTORS® Conference & Expo, meet Indian real estate practitioners in the International & 2nd Home Networking Pavilion during India’s assigned networking hours.

Ways to Tap Into Your Local Indian Community

  • Dine at Indian restaurants and patronize Indian-owned small businesses.
  • Join a local Indo-American Chamber of Commerce.
  • Familiarize yourself with local Indian cultural associations and attend their events.
  • Follow commercial listings of small retail space, businesses for sale, and lodging opportunities in your market. Many Indian immigrants want to run small businesses.
  • Approach local companies that hire visa workers, Indian companies in your area that are relocating workers, and university campuses to offer housing assistance.
Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.


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