6. A Look at India

1

• 6. A Look at India

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2
Geography
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3
Modern India

• Economic Growthsurpassing China?
• Growing Middle Class
• Homeownership86
• Subsidies and Rising Commodity Prices
• Infrastructure issues
• Spreading urbanization, crowded cities

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4
Monsoon Season

• Torrential downpours
• 80 of the annual rainfall
• June to August
• Beneficial monsoon season bolsters the economy

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5
FDI

• Top FDI Investors in India
• Singapore
• Japan
• United States
• United Kingdom
• Netherlands
• Cyprus
• Germany
• France
• UAE

• Top Sectors for FDI
• 20Services
• 8Telecommunications
• 7Computer hardware and software
• 7Construction
• 7Housing and real estate

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6
India Diaspora

• Your Next Client?
• United States 2.2 million
• Canada 1 million
• U.K. 1.5 million
• S. Africa 1.2 million
• Malaysia 2 million
• Saudi Arabia 1.7 million
• UAE 1.7 million

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NRIs and PIOs

• Non-Resident Indian (NRI)
• Person of Indian Origin (PIO)
• Overseas Citizen of India (OCI)

• Prime source of investment in real estate
• Government encourages ties and long term
  investment
• NRI Colonies--full-amenity communities

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Why Is This Important?

• Diaspora pulls Indians abroad
• Career opportunities
• Family ties
• Immigration
• Real estate business potential

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Bank Accounts
Determines flow of funds for real estate transactions Determines flow of funds for real estate transactions Determines flow of funds for real estate transactions
Non-Resident Ordinary Rupee Account (NRO) Non-Resident External Account (NRE) Foreign Currency Non-Resident Account (FCNR)
Annual repatriation limit of US1million RBI approval for repatriation NRIs only Funds must be from abroad Government approval required to withdraw funds for real estate purchase NRIs only Foreign currency from abroad
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Buying Real Estate in India

• Indian property law
• Maintain real property ownership by resident
  citizens
• Quell speculation
• Limit ownership to Indian citizens, those with
  family ties
• No ownership of agricultural land, plantation
  property, or a farm house

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Crore and Lakh
1 Crore 10 Million
1 Lakh 100,000
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Transaction Costs

• Stamp Tax
• Registration Fee
• Capital gains tax
• Real estate agent fees
• Registration
• Property tax

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13
Foreign Ownership?

• Foreign residents of Non-Indian Origin

• Non-residents of non-Indian origin

• May purchase a residence
• Prior-years stay of 182 days required plus
  proof of intent to reside in India indefinitely

• No purchase allowed
• May rent a residential property
• Maximum 5-year lease

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Commercial Real Estate

• Foreign corporations need Reserve Bank of India
  approval to buy or sell real property
• Trend toward outlying business park development
• Residential development funded with foreign
  capital requires25 acres of land
• Commercial properties minimum 50,000m2

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Rental Property

• Rent-control laws skew rental markets
• Apply to leases of 12 months or more
• 11-month leases common
• Serviced apartments provide short term housing
  for staff of foreign companies

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Real Estate Professionals

• States regulate real estate practice
• No licensing
• Informal channels-homemakers, friends and
  relatives, kiosk owners, and janitors
• National Association of RealtorsIndia
  striving for professionalism nationwide MLS

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Doing Business In IndiaBeyond the Basics

• Introductions
• Women in Business
• Business Cards
• Conversation Starters
• Meetings
• Demeanor
• Contracts and Negotiations
• A Few Taboos
• Social Etiquette

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