NRI Investment in India and R2I Financial Concerns

enqyoobOLD · Post by **enqyoobOLD** » 18 Dec 2006 21:20

Hey, gurus, I have been hunting for a good place to "demat" my few paise of shares which the issuer has been harassing me to "demat". Also I see some scary statements on the issuer's reports about how they use "unclaimed dividends" to fund charity, viz, themselves.

Checked ICICIOnline, which looks pretty impressive but includes a prominent statement that they will not deal with US-based anybody, or with residents of any nation that requires them to register, obey laws etc. Interesting. Any comments on this?

Any other suggestions? The bank where I put money in India (haha! Mailed Statements? Dream on!) claims to have a couple of branches where they will do this "demat" stuff but those are not located anywhere accessible to me.

BTW, filling out Indian equivalent of Form 1040 is not a big deal (if all one has is some "TDS"), but I have a neighbor in the matrubhoomi who used to help bring down the fruits from the trees in our yard as a kid, who is now a prominent accountant. His firm does the forms, and usually just takes what I painstakingly send him, tosses that in the trash and files forms in their special Babuese. Indian tax forms can be downloaded online, along with a typewriter-software that makes them editable (but no calculations performed). "Saral ITS-3" makes 1040 look like EZ.

Question: What is the Indian equivalent of Fidelity Investments, and is that open to the diaspora? Can one make stock-trading transactions online from US? Is it legal to do so / who takes offence?

Dileep · Post by **Dileep** » 18 Dec 2006 23:36

N^3ji, try HDFC for the demat.

The online transaction ppl can't OFFICIALLY allow USRs. But sharekhan ppl told me to just give the local address and it is OK. I have no inclination to watch the market and do research (I would rather research RADARS

) so I didn't take it.

HDFC recently started online investment facility in MFs that allow USRs too. Here is what I got from them:

Dear Valued Customer.

Thank you for your continued patronage with HDFC Bank & your interest in the Online Investment Services Account.

How to get started ?

You need to have a HDFC Bank NRE / NRO Account*
You need to fill in the Investment services account opening form and submit the required documents to get registered for this service.

The attachment has the following - (1) ISA opening form in PDF format of the Online Investment Services Account opening form. You will need Adobe Acrobat Reader to open this. Kindly requesting you to take back to back print outs of the same. (2) The instructions to fill the application forms and the documentation check list.

Benefits of online investing

No filling of multiple application forms. Only a one time registration agreement to be signed and submitted.
Paperless method to invest in Mutual Funds. No application forms, No Cheques, No Documents required for any transaction.
Direct Credit to bank account for redemption and Dividend proceeds.
Customer can view his online mutual fund holdings on Netbanking with the latest valuations.

Important Information

NRIs in US can invest in Mutual funds in India and do online trading in MFs.
PAN No. is not mandatory for NRIs as of now to invest in Mutual Funds.
No Transaction Charges ( The entry loads and exit loads taken by the AMC will be applicable when you buy / sell)
Customers can now invest in schemes of DSPML MF, PRUICICI MF, HDFC MF,Standard Chartered MF & TATA MF.
WE will be adding more AMCs over next 3-4 Months.
To get the same day NAV, the cut off time in net banking is 1 pm.

Before you send . . .Check List

All Documents to be self attested , even the originals in all pages
The address proof should completely match with either the mailing / overseas address what you are providing in the Application form
The First applicant in the ISA a/c should be the same as the first applicant in the bank NRE / NRO a/c
For opening ISA for NRE and NRO - 2 separate forms are required

I didn't go for it since I am closing shop in three months.

SaiK · Post by **SaiK** » 19 Dec 2006 00:03

but the thing is for demat a/c in hdfc, i got a warning that i need to submit my PAN card.. where do i go? and the forms details don't match my income source etc.

blah!@.. duh!.. they just want my pan #, else they would freeze my demat a/c. dec is deadline.. i don't think i have time. sope, they would freeze my a/c.

otoh, i hope i wd find some solution to keep that paltry a/c active.. though i am not good at shares etc.. , these were just given to me having been associated with working at certain companies.

crisis!

Dileep · Post by **Dileep** » 19 Dec 2006 00:24

You don't have a PAN? Or you can't get one?

If you have a PAN, just give it to them. It doesn't matter if it is old and match nothing except the name and the face.

NRIs can get PAN. You just need an authorized rep in India. No big deal.

Rishirishi · Post by **Rishirishi** » 19 Dec 2006 00:34

let's take this to the investment thread ...

btw, you are allowed to repatriate the equivalent of what you brought in plus the nominal interest of an NRE account (Form A2, I believe) ... so, out of your 70 lacs, 40+interest is repatriable ... rupee appreciation adds to your gain

In theory, yes. However.

out of the 70 lacs the flat is "worth", any prospective buyer would want to pay about 30% in black. that is about 20 lacs (that can be repatriated by some haval route, but I do not do such things, so I will have a problem of what to do with that money).

Second problem is the time and effort a sale can take. I would easyly end up spending at least 2-3 days of my time to get it all done, I would have to allocate a few days in India, and who knows, what obsticles will follow. The process could take month or two (wrong type of buyer, government clearances, papers to be signed here and there).

Thirdly the rupee has lost about 10% of its value.

So you see that even of the property has appreciated some 80 %, I would actually strugle to get any profit at all from my investment. It would cost me time and effort.

Hence purchasing a property in India, with the aim to make a few fast bucks, is a bad idea.

But I am happy with my investment. Becasue I have the psychologial satisfaction of owning a property in a good place and I can move there if needed. The way Indian economy is movening, it would not surprise me if Indian property market reaches simmilar cost level as the west. In that case I may not be able to purchase just like that.

So as you see. If you wan't to make a profit, invest your dollars in shares, debentures, bonds or funds. Where you can buy and sell, by the touch of a button.

But if you wan't that satisfaction of owning a property in your homeland, then purchase a flat, in a new upcomming area. You won't loose in the longrun (just make shure that it is not a speculative projects, where people are not going to be living).

An the added benefit is of course, that I like my money to do some good in the land of my roots.

pradeepe · Post by **pradeepe** » 19 Dec 2006 00:36

Dileep wrote: You can in fact directly transfer to HDFC account as an international trfr. Costs $42

Need to check it out sometime.
Been using my old reliable SBI (knowing the branch manager in India helps) account for ages. They have a local NY branch. So I wire money there with forwarding directions to overseas branch in India. Wire cost falls into the domestic category ~$15. Never really probed the exchange rates I was getting but they didnt seem out of whack.

Alok_N · Post by **Alok_N** » 19 Dec 2006 00:46

Rishirishi boss, are you following the thread at all? ...

the reason I was curious about predictions of rupee appreciation was because I am making payments on a Flat ... so, what is with this advice that I should buy a flat?

ASPuar · Post by **ASPuar** » 19 Dec 2006 00:51

enqyoob wrote:Hey, gurus, I have been hunting for a good place to "demat" my few paise of shares which the issuer has been harassing me to "demat". Also I see some scary statements on the issuer's reports about how they use "unclaimed dividends" to fund charity, viz, themselves.

Checked ICICIOnline, which looks pretty impressive but includes a prominent statement that they will not deal with US-based anybody, or with residents of any nation that requires them to register, obey laws etc. Interesting. Any comments on this?

Any other suggestions? The bank where I put money in India (haha! Mailed Statements? Dream on!) claims to have a couple of branches where they will do this "demat" stuff but those are not located anywhere accessible to me.

BTW, filling out Indian equivalent of Form 1040 is not a big deal (if all one has is some "TDS"), but I have a neighbor in the matrubhoomi who used to help bring down the fruits from the trees in our yard as a kid, who is now a prominent accountant. His firm does the forms, and usually just takes what I painstakingly send him, tosses that in the trash and files forms in their special Babuese. Indian tax forms can be downloaded online, along with a typewriter-software that makes them editable (but no calculations performed). "Saral ITS-3" makes 1040 look like EZ.

Question: What is the Indian equivalent of Fidelity Investments, and is that open to the diaspora? Can one make stock-trading transactions online from US? Is it legal to do so / who takes offence?

Last I heard, ICICIDirect is quite reliable. And you can make trades online from anywhere there is internet. Youll just have to stay awake in the middle of the night if youre trying to do any sort of realtime mointoring.

Dileep · Post by **Dileep** » 19 Dec 2006 01:10

The problem with trfr to NYC and then onward is, the moron who is supposed to be the manager of a business branch of BOFA couldn't get it after half an hour explanation witha a printout from HDFC site. I had to thank him for his time and walk away.

The direct trfr was done by the CFO of my company when I originally moved here (for tickets and moving exp). He asked for my local bank account details, and told me he will wire the money. I was totally unaware of the details and complications, so I just e-mailed the A/c no and branch name to him. Then told my travel agent to expect payment in a weeks time.

The next morning I saw the money in my account! That WAS a surprise.

ShauryaT · Post by **ShauryaT** » 19 Dec 2006 01:27

Dileep wrote:The problem with trfr to NYC and then onward is, the moron who is supposed to be the manager of a business branch of BOFA couldn't get it after half an hour explanation witha a printout from HDFC site. I had to thank him for his time and walk away.

The direct trfr was done by the CFO of my company when I originally moved here (for tickets and moving exp). He asked for my local bank account details, and told me he will wire the money. I was totally unaware of the details and complications, so I just e-mailed the A/c no and branch name to him. Then told my travel agent to expect payment in a weeks time.

The next morning I saw the money in my account! That WAS a surprise.

That is becuase the CFO most likely called the wire dept of the bank and not the local branch....The wire dept does this and nothing else and se are experts in this process. So, if you do this frequently enough then get the capability to wire by directly calling your US bank;s wire dept. I have been doing for for nearly a decade now and 99% of the time the money is credited within 24 hours.

Added: Some US Banks have an online web system for international wires for customers.

Rishirishi · Post by **Rishirishi** » 19 Dec 2006 02:11

Rishirishi boss, are you following the thread at all? ...

the reason I was curious about predictions of rupee appreciation was because I am making payments on a Flat ... so, what is with this advice that I should buy a flat

Areee yaar. You just made me move from the Economic thread. So I haven't followed the discusion.

If you are going to make a payment, you will be needing dollars in the near future.
There are roumers that the Chinease are threating to dump a lot of dollars in the market and the Iranians have already decided to do just that. So I suggest you try to hang on a few days and see, what happnes.

As you have decided to purchase the flat and have already made the first payments, you really do not have much chioce, other then transfer money when needed.
Personally I think the Rupee will depreciate against the dollar (lot of reasons, but too long to elaborate). But do not worry, as you have made an investment for the longrun.

My advice, is that do not think too much about it. There is little you can do to change the course. You you have a flat and that will stay the same, no matter the exchange rate.

I would wait a few days, at least.

pradeepe · Post by **pradeepe** » 19 Dec 2006 02:24

There are roumers that the Chinease are threating to dump a lot of dollars in the market and the Iranians have already decided to do just that. So I suggest you try to hang on a few days and see, what happnes.

RR, Wait for what?

Alok_N · Post by **Alok_N** » 19 Dec 2006 03:46

RR,

I am perfectly capable of inactivity ... need no advice on that ...

my query started because someone posted that the rupee is expected to appreciate ... now, you are saying that you expect it to depreciate for reasons that are too long to explain ...

all we need now is for a third pundit to say that he expects rupee to stay flat ...

My advice, is that do not think too much about it. There is little you can do to change the course. You you have a flat and that will stay the same, no matter the exchange rate.

there is a difference in our investment strategy ... you are concerned about not being able to repatriate the funds in $$ ... my philosophy is to make profits and then use the profits in India itself (mostly for family but if I ever strike it big, then for charitable causes as well) ... right now I have two flats in noida and indirapuram ... one is paid for and the other I am making payments on ... the noida one I will sell once the metro gets there and there is appreciation ... I will most likely reinvest the "cash" part of that trade into the down payment of a new place and deposit the check part in my NRO which can be either repatriated or reinvested or whatever ... in all of this, timing the transfers of fresh $$ funds is important ... I am maintaining a buffer in India so my next year's worth of installment payments are already covered ...

so the question of timing is simplee this: what is the predicted optimum time for transferring $$ during the next one year? ... under the downhill from here scenario, transferring in the near term is better ... also, if you are predicting a tanking of the dollar, then transferring tomorrow is the right move ...

another thing to consider is the mode of investment ... once the $$ lands in India, I can put them in FDs that earn 7%+ ... if the $$ is sitting in the US, such a CD is not available ... its too bloody complicated ...

now, for the apparent contradiction: if the dollar is about to tank then why do you expect the rupee to depreciate?

ankurv · Post by **ankurv** » 19 Dec 2006 04:01

Dileep wrote:The problem with trfr to NYC and then onward is, the moron who is supposed to be the manager of a business branch of BOFA couldn't get it after half an hour explanation witha a printout from HDFC site. I had to thank him for his time and walk away.

Every other bank except for BOFA is able to send wire transfers to India using the info that HDFC gives out on its website. and this is after BOFA has a tie up with HDFC as one of the intermediary banks to route money through. I just went the harrowing experience with the idiots at BOFA - their wire transfer form ismissing a couple of fields that the HDFC info asks for. Every other bank has that info in their form :-(

Finally ended up sending money through ICICI's Money2India - even that turned out to be an experience in itself. They held onto the money for over 3 weeks citing security and verification reasons. And this is after they had called me thrice and my associate in india twice to verify the details and completed the process. I had to shout and bitch at them a couple of times for 3 consecutive days as well as to get a friend in ICICI involved to get the money through. Have used them a few times earlier with no problems but am hesistant to use or recommend them anymore.

-Ankur

SaiK · Post by **SaiK** » 19 Dec 2006 05:15

yeah Dileep.. and i am trying to.. sent appln, but forgot to send them the pp copy. i am trying to get it emailed, so that my friend does the submission.

hope, he could collect the pan in time and hand over to the bank. not a big money i 'd lose any way, but at least my process is correct and clear of not having done some legal doc.

enqyoobOLD · Post by **enqyoobOLD** » 19 Dec 2006 08:52

Prob with ICICI, as I mentioned, is that their website says clearly that dealings with US and US-based NRIs are verboten.

Note : - This is by way of intimation of the availability of the ICICI Direct service and does not constitute on offer to buy or sell or a solicitation in this regard made to any person. This service is not available to foreign residents including Non-Resident Indians (NRIs) in United States. It is available only to NRIs residing in jurisdictions permitting investment in and trading of Indian securities on Indian stock exchanges. This service is not available to any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where availing of such services would be contrary to any applicable law or regulation or which would subject ICICI Bank Limited, ICICI Brokerage Services Limited and any of their respective affiliates or group companies to any registration or licensing requirement within such jurisdiction. Availability of this service to NRIs is subject to compliance with procedural formalities as prescribed by ICICI Brokerage Services Limited from time to time.

Ever heard of an outfit called "Select Group"?

Also, Sai, for most ppl, "PAN applied for" is same as providing PAN, since getting PAN is not that fast.

If they have your passport details, I don't see why they feel compelled to freeze your acct. Then again, I haven't figured out the demat scam anyway. Seems like in the US the online trading company also runs a cash mutual fund which serves as the sump for transactions. Here apparently one has to create a network between a bank account and a brokerage account and an internet service (except maybe ICICI).

Overall, the main constraint is like for everyone else - don't want $100 worth of hassle to manage $0.02.

Re: real estate transactions. I heard recently about someone who made such a transaction - for, say, Rs. 10 crores. The tax-paid documents showed the price paid as Rs. 2 crores, rest was under-the-table. Paid in counterfeit currency, courtesy of ISI.

Dupee can't complain because tax was paid only on Rs. 2 crores.

Rishirishi · Post by **Rishirishi** » 19 Dec 2006 18:11

there is a difference in our investment strategy ... you are concerned about not being able to repatriate the funds in $$ ... my philosophy is to make profits and then use the profits in India itself

This changes the whole game. You are investing in India to make capital gains, wich you will use to finance purchases in India.

so your first concern is that a dollar depraciation (rupee appreciation) may increase the accusation cost (in dollars).
The dollars is a world currency and massive ammount of dollars is kept by forigin banks (as goes with India). Now the americans are threating to force the chinease to appreciate their RMB, The Chineae on their part are threating to dump their trillion dollars holding (wich will spark a worldwide sale of dollars) In such a senario, the dollar will take a hit and depreciate against all currencies. However the likelyhood of something like that is small, as the Chinease will be taken to the cleaners (their trillion dollars would depreciate, hence they will be the greatest loosers. Appart form a very hostile US reaction, wich is going to screw their manufacturing.)
The senario of a massive dollar depreciation is thus not likely in my veiw.

India has been running a budget defecit for long time now and the inflation is about 5-6 %. This is why the rupee has been depreciating against the average of other currencies (but so has the dollar). I expect the rupee to weaken against most other currencies, but can't say about the dollar.

NOW.
If you are very concerned with a rupee appreciation, you may consider to hedge it. You simply take a dollar loan on the ammount that you will be needing for your new flat, and send it off into a rupee account. You may even consider paying the builder 95% of the funds in advance (if you trust him, always retain 5% for the last finishing touch). Ask how much discount the builder can give you. Normally they will be able to give a greater discount then the bank interest (as their cost of capital is much higher).

What i would do:
I would take the "risk" and hope that the rupee depreciates and try to make the payment as slowly as possible.

Gaurav_S · Post by **Gaurav_S** » 26 Dec 2006 05:04

Bank loans are big no-no in NRI districts of Gujarat

AHMEDABAD: Bank loan is a word that does not exist in the dictionaries of many businessmen in at least four districts of the state, which are flush with NRI remittances.

When a majority of businessmen in Kutch, Anand, Kheda and Navsari need money for a venture, they do not head for banks looking for loans. Rather, they dig into their own pockets. And no amount of promotional activity by banks â€” which have to ensure that at least 60 per cent of their deposits are disbursed as loans â€” has helped to improve the dismal credit-deposit (CD) ratio of below 30 per cent in these districts. Otherwise, the CD ratio of commercial banks in the state hovers around 65 per cent.

Gujarat has more than 8 lakh NRI accounts with total NRI deposits of Rs 17,486 crore. NRI deposit worth Rs 8,390.15 crore is contributed by these four districts. While these districts have the maximum number of NRGs, two â€” Dangs and Porbander â€” have a low CD ratio of 25 per cent, due to poor business activity.

According to the latest review report of State Level Bankersâ€™ Committee (SLBC), CD ratio of commercial banks in Kutch, Anand, Kheda and Navsari is 22.78 per cent, 24.85 per cent, 27.30 per cent and 17.92 per cent respectively, says Dena Bank GM Purshotam Kumar.

ICICI Bankâ€™s senior general manger, international retail product group, Anup Bagchi says remittances from NRIs make a higher contribution to the countryâ€™s forex reserve of $160 billion than FII and FDI. And, Gujarat receives one of the highest remittance.However, RBI has asked all banks to step up their credit activities in these districts in order to improve the CD ratio.

posted from TOI

Raj · Post by **Raj** » 28 Dec 2006 07:22

http://money.cnn.com/news/newsfeeds/art ... 061564.htm
Pending Funds Plan To Track Indian Stocks

Every few months, news arrives to say that might be changing. In October 2005, Halter Financial Group launched its Halter USX India index to lay the groundwork for future Indian ETFs.

Established in partnership with the American Stock Exchange, the index tracks companies that trade on U.S. exchanges, but that earn a majority of their revenue in India. The group has climbed 27% since January.

Halter, a corporate consulting firm, had earlier launched the USX China Index. It then partnered with Powershares to create the Golden Dragon Halter USX China Portfolio.

Powershares plans an India Tiger Portfolio, expected to trade under the ticker PGK, which will track the Halter India index. Powershares may also be planning an ETF aimed speficially at companies trading on Indian exchanges.

On Dec. 20, Barclays Global Investors launched the iPath MSCI India index ETN. The ETN, or exchange traded note, is a kind of bond-ETF hybrid developed by Barclays.

The fund is based on the MSCI India total return index--the largest 68 companies by market capitalization listed on India's National Stock Exchange.

Omar · Post by **Omar** » 01 Apr 2007 23:09

Indian firm announces 4.5 bln dlr chip plant investment

India's Hindustan Semiconductor Manufacturing Corp (HSMC) said on Wednesday it would invest up to 4.5 billion dollars to build two chipmaking facilities in a licensing tie-up with leading German chipmaker Infineon Technologies.

Hindustan Semiconductor will use "leading edge" process technology under licence from Infineon Technologies AG in its products, according to a statement by the two companies outlining their signed memorandum of understanding.

The first plant "will require an investment of approximately one billion dollars and will produce chips on eight-inch wafers. The second will be for more advanced 12-inch wafers requiring an investment of 3.2 to 3.5 billion dollars," the statement said.

Last year SemIndia, promoted by a consortium of non-resident Indians, announced a three-billion dollar investment to manufacture semiconductors in the southern information technology hub of Hyderabad.

Suraj · Post by **Suraj** » 06 May 2007 05:47

Can NRIs celebrate India's trillion-dollar economy?

If an American NRI visits India now, his dollars will buy much less. This is because the Indian rupee has strengthened against the dollar since 2002, crossing the watershed of Rs.41 to one dollar last week.

By this crossing, India joined the top dozen countries in the trillion-dollar club. The Indian economy is a trillion-dollar economy since its GDP is now valued at Rs.41 trillion. In 1998, the dollar was valued at Rs.41.26 but the Indian economy was not so big in terms of GDP.

Then the dollar become stronger vis-a-vis the rupee to 43.05 on its average annual rate in 1999, moving up to 44.94 in 2000, 47.18 in 2001, touching a peak of 48.59 in 2002. At one point in 2002, the dollar commanded over Rs.49! Then it started declining to 46.58 in 2003, easing off to 45.31 in 2004, edging down to 44.10 in 2005 and touching 43.21 in 2006.

Now when the dollar touched Rs.41, India entered this exclusive Club because its economy has grown dramatically in the last nine years.

So, is it an occasion for NRIs to celebrate India's progress?

For a start, the NRI visitor will get less for his dollars in India. This is a lot less than Rs.48-49 he got for his dollar in 2002. But his Indian relative visiting him on holiday in the US will have a few more dollars to spend there.

If the NRI wants to buy property in India, it will make a dent in his cash flow, as he will transfer many more dollars for the same property price. He would have been better off if he had bought his property five years ago when the prices were not so astronomical and the dollar was at a peak versus the rupee. For NRIs importing goods and services from India, may pay more but in almost all cases, Indian exporters always quote in dollars and this will not make much difference.

The NRI investor will benefit twice over. The Indian stock market capitalisation at $944 billion is still shy of the one trillion mark. A Credit Suisse report said that going by history, stock markets in eight out of 10 countries had risen in a one-year period after they first crossed the $1 trillion mark in GDP. Thus the Sensex can possibly maintain its bull run despite the yo-yo performance this year. So an NRI investing in Indian stocks can reap twin benefits of exchange rate and dividends over a period.

If an NRI is exporting goods to India, he may find that the demand is higher because Indian importers of American goods will now find them cheaper. So the NRI exporter to India stands to benefit by selling more. Another factor is the high growth of Indian economy and so the higher demand for 'capital goods' and specialized equipment to set up new factories and businesses.

A number of Indian companies rely heavily on imported capital equipment and consumables on a regular basis and they may well expand their operations if they save on their import costs from the US.

NRIs can also look forward to more Indian companies buying out more foreign companies. With a stronger rupee, they will pay less in terms of dollars for their new acquisitions. The Reserve Bank of India has recently allowed all Indians to invest up to $100,000 every year. Now NRIs may find their Indian cousins not just on a shopping spree in the US but also scouting for stocks by paying less for their dollar investments in rupees.

The Indian cousins may well become their neighbours after investing in property because they pay a down payment of $100,000, get a mortgage from an American bank with operations in India or an Indian bank with operations in the US and pay the balance over the next few years - all legally!

India, as an economy, stands to gain from this rupee-dollar rate. A big chunk of India's imports are crude oil and gold. Oil imports make up a third of all imports into India. Gold is consumed in large quantities in India. Now Indians will benefit by paying less for both these commodities. NRIs in the US buy a lot of gold ornaments before any wedding in the family. Now they can come to India to buy them as gold ornaments will perhaps be cheaper for them in India than in the US.

The trillion dollar club has only 12 members; the top member US having GDP of $13.4 trillion while number two Japan has a GDP of $4.4 trillion and the rest have GDP of between two and one trillion dollars. Now India has made it to this club, so all NRIs can celebrate!

Suraj · Post by **Suraj** » 29 May 2007 11:16

NRIs get investment info centre
[quote]The Ministry of Overseas Indian Affairs and the Confederation of Indian Industry (CII) today launched a â€œone-stop shopâ€

Paul · Post by **Paul** » 19 Aug 2007 04:23

COUNTRY PROFILE: INDIA (KERALA STATE)
Population: 31,841,374. 20.97 percent unemployment,
the highest in India. 28.4 percent below the poverty line
(36.3 percent for India) and 89.81 percent literacy rate
(65.38 percent for India).

Migration history: Large flows of out-migration since
independence in 1947. Since the oil boom in the 1970s,
emigrants have primarily gone to the Gulf countries. From
1999 to 2004, both migration to Gulf countries and remittances
received from these states increased by 35 percent.
Migration to the United States, Europe, and Africa also
increased, from 5 percent to 10 percent. During this same
period, the number of people unemployed in the state
doubled.
Host countries: Gulf countries (98.4 percent): UAE
(46 percent), Saudi Arabia (28.9 percent), Oman (9.4
percent), Kuwait (6.3 percent), Bahrain (3.9 percent), and
Qatar (3.1 percent).
Estimated number of migrants overseas: 1.84
million (estimated from a Center for Development Studies
study in 2004). A significant number of emigrants return to
the state; the above study estimated that 890,000 of these
emigrants had returned in 2004. 43.7 percent of emigrants
are Muslim, 31.2 percent are Hindu, and 25.1 percent are
Christian. Female migration increased from 9 to 16.8 percent
in 2004. This same study estimates that 17.6 percent
of households have at least one emigrant.
Common occupations of migrants: Private sector
jobs (70.4 percent), followed by construction (15.8 percent)
and manual contract labor jobs (6.6 percent).
Estimated remittance flows: US$868 million per
year. Cash remittances make up 9.3 percent of the state
domestic product. Amount received per year is estimated
at US$1,490 (Rs 61,007). Total remittances received
were seven times what the state received from the central
government as budgetary support. 61 percent of recipients
receive remittances from a spouse; in over 75 percent of
those cases, the migrant is the husband, except for
Christian migrants, where husbands and wives remit
equally. Male spouses tend to send slightly higher amounts
than female spouses. Common money transfer
methods: 91.4 percentof remittances are received
through a bank; 4.5 percent
through a convenience store or post office. Only 4 percent
are received either from money transfer companies, credit
or ATM cards, or employment agencies. At least 56 percent
of those who collect money from a bank leave part or all in
their account.
Use of remittances: 78 percent of remittances are
spent on basic needs, 12 percent for emergencies, and
the rest for luxury goods or to repay debt. Most recipients
report having a business or mortgage as an economic
obligation. Those who save money or have a bank account
receive on average more remittances than those who
do not.
Sources
â– Census of India 2001, http://www.censusindia.net
â– Center for Development Studies, Trivandrum, Kerela,
India, http://www.censusindia.net/results/provindia3.html
â– Government of Kerala, http://www.kerala.gov.in/
â– Kerala State Planning Board,
http://www.keralaplanningboard.org
â– S.M. Vijayanand. Poverty Reduction through Decentralization:
Lessons from the Experience of Kerala State
in India. Asia and Pacific Forum on Poverty. Vol 1,
http://adb.org/Poverty/Forum/frame_vijayanand.htm
â– Survey carried out by Jinu Koola in October 2006 in
coordination with Manuel Orozco. Sample size was 225
remittance recipients.

Rahul Mehta · Post by **Rahul Mehta** » 19 Aug 2007 13:42

Singha wrote: and isnt mauritius some kinda same thing wrt India, I recall lot of shell cos incorporated there and hawala channels taking money out of
india for round tripping ?

Yes.

The banks in mauritius are run by Indian elitemen, and many criminals like Shri Dawoodbhai, tax evading elitemen, corrupt SCjs, corrupt HCjs, all most all IAS, almost all IPS, most MPs, almost all Ministers, almost all CMs etc have their accounts in Mauritius. They take their ill gotten money there and invest into India via Mauritius. The corrupt MPs even made a treaty which ensures that these people wont have to pay much income tax, capital gains tax (short term or long term). When IT dept objects, the then FinMin Yashwant Sinha forced the IT dept to withdraw the memo. Which is why YS is known as MauritiusPurush on BR. And YS's daughter law made Rs 500 cr that year from her salaries and bonus in a US based company. Later when some people challenged this treaty in SCjs, the corrupt SCjs, who also have heavily invested Mauritius cancelled the objection?

---

In short, not only dirty money of Indian Nbjprie comes to India, the incomes from that are also tax exempt.

---

Singha,

Do you support this?

If not, what solution do you propose?

.

.

member_11784 · Post by **member_11784** » 20 Aug 2007 19:26

can anyone tell me what the percentage of NRI investors are present in the gulf region mainly the UAE?

there r around 1.4 million indians out of which 30% are white-collar + skilled professionals. Considering a family of 4 I want to put the figure at around 100,000. Do you think there are so many NRI investors trading on NSE and BSE?

thanks

Dileep · Post by **Dileep** » 21 Aug 2007 13:52

Earlier the NRI folk used to send money back, and the folk here used to spend it, Bank FD it or buy real estate with it. Mostly the first. The stock market and mufu (monopoly of UTI) was tightly controlled, so it was not possible, or too difficult to invest in stock/derivatives.

When I made the move in 2001, it was still same way, but right after mufu opened up, and slowly NRIs got the word and started investing. There days, banks like HDFC try hard to get people to invest, so almost everyone does.

Still there is a big Gulf population who just send money back here.

Singha · Post by **Singha** » 21 Aug 2007 14:22

my friend purchased a flat recently from a person working in a leading pvt
equity firm. he says the guy talked about lakhs as if "they are coins to
be put in a clay piggy bank"

Gaurav_S · Post by **Gaurav_S** » 21 Aug 2007 16:56

Singha wrote:my friend purchased a flat recently from a person working in a leading pvt
equity firm. he says the guy talked about lakhs as if "they are coins to
be put in a clay piggy bank"

Singha

IMO in one sense he is correct. This is seen everywhere in India these days. Lacs are seen as thousand Rs by many people.

If you dont have some siginificant moolhas in the bank then its hard to get attention of financial adviser or a bank.

Rahul Mehta · Post by **Rahul Mehta** » 21 Aug 2007 19:22

Singha: my friend purchased a flat recently from a person working in a leading pvt equity firm. he says the guy talked about lakhs as if "they are coins to be put in a clay piggy bank"

gauravsurati: IMO in one sense he is correct. This is seen everywhere in India these days. Lacs are seen as thousand Rs by many people.

Thats because RBI and banks has been raising money supply M3 at the rate of 15% to 20% for past 15 years.

.

Singha · Post by **Singha** » 21 Aug 2007 19:34

RM only tiny minority in M&A space can be salaried employees and still
rake in crores. RBI doesnt have much with it, most of the PE money and
big loans taken out by indian corporates in raised abroad because the
interest rates are lower there and interest in india is high.

Paul · Post by **Paul** » 21 Aug 2007 21:27

Has anyone purchased a site in Bangalore through Karnataka Housing Board or the BDA. A friend of mine has been allotted a site in Hosur and tells me it is a goldmine. He may have to pay 25Lakhs for the site.

Looks like sarkar has also cottoned on to the soaring land rates and wants a share of the action as well.

Gaurav_S · Post by **Gaurav_S** » 01 Sep 2007 17:48

NRIs know the name of the BSE game

NRI investors are sharp. They waste no time in picking up stocks when the prices are down on the Bombay Stock Exchange (BSE) and sell them quickly when the prices move up. The short-term investors know the game of making money on the BSE.

An analysis of NRI investments published recently shows that NRIs are always on the lookout for sharp movements. So they doubled their equity investments in August as compared to July.

The BSE Index, called Sensex, lost around a thousand points in four weeks during the July-August period as a result of the subprime crisis that broke out in the US and sent shock waves across the globe.

Any correction in the market attracts them and here was an opportunity to pick up equities at low prices. NRIs were quick to cash in this time as well. The BSE lost over 1,787 points between July 26 at 15,776 points and Aug 21 at 13,989 points.

This was a prime opportunity to enter the market for NRIs. They purchased shares worth almost Rs 7 crore ($1.7 million) in August. This is double the figure of around Rs 3 crore ($0.73 million) in July when the index gained about 900 points. After this peak, a decline has been noticed because the market started to recover from 13,989 points on Aug 21 to 14,993 points on Aug 29.

The same trend has been spotted in the past six months. In January, the Sensex gained over 300 points and NRI sold equities worth over Rs 2 crore ($0.487 million). As the index nose-dived over 1,000 points in February, they started buying in a big way and invested a whopping Rs 68 crore ($16.58 million).

In March, they purchased equities worth over Rs 76 crore ($18.53 million) and in April, as the index shot up over 800 points, they were offloading equities to the tune of almost Rs 25 crore ($6 097 million). In May and June, NRIs continued their selling spree.

This compares with an average sale or purchase of Rs 10 crore ($2.439 million) a month. In 2006, when the Sensex gained 4,300 points, the NRIs invested almost Rs 8 crore ($1.95 million). Their purchases in 2007 have rocketed 10 times, to almost Rs 80 crore ($19.51 million) so far.

The long-term NRI investors have a different approach. They stay invested because they know that the fundamentals of investments in India are rock solid. The economy is performing extremely well with over nine percent growth.

Although the Indian economy is now strongly linked to the global economy, it has the inherent resilience to stand up to any external shocks unless they have the intensity of a tsunami.

In addition, the financial system is also strong to withstand such shocks as the Reserve Bank of India has an eagle's eye on all such developments. When the sub-prime crisis struck the Indian markets, a window of investing at low prices opened for a few days. NRIs took full advantage to reshuffle their portfolios for quality, high growth stocks.

"As we have witnessed in the recent past, when liquidity factors were driving global markets, markets could soon gain momentum, as liquidity is here to stay. And if the US were to increase its own liquidity to solve its own domestic concerns then liquidity is not only here to stay but also increase," says Sanjay Durgan of AbunDanze.

"For the time being however, caution is advised as subprime worries, along with some domestic political concerns, is changing the risk profile of global investors, resulting in flight of capital to less risky asset classes. Yet this is an opportune time for investors to reshuffle their portfolios. The Indian growth story remains intact and there is no concern from the long-term perspective."

The subprime factor has not yet played itself out fully as markets could be affected adversely with more negative news. At the same time, the Left parties challenged the India-US civil nuclear agreement. The furore simmered, sparking fears of snap elections.

The market took a beating. Now signs of recovery are visible but there are mixed opinions on how the recent global slump may or may not affect India. Yet India's big picture is the growth trajectory as the domestic accumulation of capital at 32 per cent could keep the economy going.

And the global economy, including that of the US, is firm. It can be argued that the correction in the Indian market had a positive side as it withstood the tremor. The long-term investors stay invested. Since no one knows when it will happen again, the short-term NRI investor will be ready.

Still remember the days when my grandfather buy shares and phsically receive by post. Now everything is virtual.

Making some extra cash is just a click away!!

IMO SEBI has done quite a good job. Reforms have made investing safer and simpler (demat etc etc). Slowly Indian share market has gained maturity.

member_12135 · Post by **member_12135** » 12 Sep 2007 18:02

does any one know, if there are any restrictions to transferring funds from India to US in terms of how much you can transfer per transaction /per year etc?

can I deposit let's say a check drawn from my own account in an indian bank for let's say 10 lac INR into my US bank account?

i have done the opposite many times i.e. deposit US checks in my indian accounts both NRE and reggular bank account in india w/o any problems
i was just wondering if the reverse is also true

those with experience, please share

thanks

Dileep · Post by **Dileep** » 13 Sep 2007 11:50

You can not simply deposit a cheque to transfer Indian funds to US. There is restrictions, limitations and procedures.

This is from HDFC Bank

RBI Guidelines.

Private Travel

Foreign exchange up to US$ 10,000 is permissible in any calendar year for tourism or private travel to any country other than Nepal and Bhutan on the basis of self-certification. When traveling to Nepal and Bhutan, you can carry as much Indian currency as you wish, except currency notes with denominations of Rs.500 and above.

Study Abroad / Medical treatment abroad / Employment abroad / Emigration / Maintenance of close relatives abroad

Foreign exchange up to US$ 100,000 is permissible on the basis of self-certification. For students the limit of $100,000 is applicable for each academic year. For medical treatment in addition to $100,000, foreign exchange up to US$ 25,000 can be taken for meeting boarding/lodging/travel expenses of the patient and also for the accompanying attendant on self-certification. Amounts in excess of the limits can be released on basis of documentary evidence of requirement.

Remittance for Miscellaneous Purposes up to US$ 5000

Remittances can be made up to US$ 5000, for any miscellaneous purpose, without furnishing documents.

Donations

Donations can be made to anybody up to US$ 5,000 every year per remitter on self certification.

Added: http://www.rbi.org.in/Scripts/FAQView.aspx?Id=66

Raju · Post by **Raju** » 13 Sep 2007 11:51

that is old limits, now the limit is $100,000.

They need to update their site.

Dileep · Post by **Dileep** » 13 Sep 2007 12:07

Well, it says 10K for private travel, 25K for bijness ravel, and 100K for medical treatment/ejukashun/immigrashun. Correct onlee, per RBI too

vina · Post by **vina** » 13 Sep 2007 15:20

Dileep wrote:Well, it says 10K for private travel, 25K for bijness ravel, and 100K for medical treatment/ejukashun/immigrashun. Correct onlee, per RBI too

You can repatriate upto $100,000 per year , no strings, no questions asked for personal purposes, including investing abroad ... I sent money back to Massa land to meet some commitments .. Citibank gave me form to fill and and I had to sign a declaration on the $100,000 per year limit and put in your PAN no and other details.. That is all. Very smooth and easy.. A very very far cry from the days of $5 per day "travel allowance" and begging for foreign "exchange"

Singha · Post by **Singha** » 13 Sep 2007 17:07

iirc limit for forex of a trip any duration was $500 . so T-bone steaks and
visiting the fleshpots of any city for sure.

Dileep · Post by **Dileep** » 14 Sep 2007 09:01

Singha wrote:iirc limit for forex of a trip any duration was $500 . so T-bone steaks and
visiting the fleshpots of any city for sure.

Soree, your IIRC is old info.

For personal (read tourism, visiting relatives etc), it is 10K per year, and for bijness (what we people do on company money) it is 25K per year.

vina, The RBI site also mentions a 50K per year (not 100K) no questions asked option in addition to the various purpose linked 100Ks. Do you mean that?

Suraj · Post by **Suraj** » 08 Nov 2007 00:03

The USD situation is looking increasingly precarious now, IMHO. Gold is up. Silver is up. Commodities/oil are up. I don't envision an apocalyptic global crash, but the USD is no longer something I have much faith in. There are a lot of US based NRI folks on here who would benefit from diversifying out of the dollar, into Rupees, amongst others, particularly those in their 40s or later who would lose a lot of retirement income. I'd like to start a renewed discussion on the options available:

* What options to NRIs (US and otherwise) have to invest in the Indian equity market directly, not via US MFs or ADRs/GDRs ?
* Note that direct investment in Indian funds triggers US PFIC (passive foreign investment company) tax rules. What are folks' experiences dealing with this.
* What are the options to purchase and hold gold ? Not just physically but any means.
* Recommendations on foreign currency ETFs or accounts.
* Anything else

Bharat Rakshak

NRI Investment in India and R2I Financial Concerns

nri investors in middle east

Money Transfter : India to US