21% of Singapore NRIs are influenced by global trends in investments, survey reveals

The investment landscape in India offers an enticing opportunity for non-resident Indians (NRIs) looking to diversify their portfolios. This is because NRIs can choose from a diverse array of options, ranging from conventional choices like real estate and equities to modern avenues such as startups and angel investing, allowing them to align with their risk preferences and financial objectives.

The flourishing Indian economy, thriving startup ecosystem, and supportive government initiatives collectively provide the opportunity for appealing returns. Additionally, NRIs frequently bring innate knowledge and connections within the Indian market, which can assist in making informed investment decisions.

Aligned with the dynamic investment opportunities in India, there has been a consistent increase in NRI investments. While India’s investment landscape proves lucrative for NRIs, the crucial aspect of considering the time horizon in shaping financial strategies is often overlooked. In this context, SBNRI, India’s foremost NRI-centric investment platform, has conducted a recent survey uncovering the pivotal factors influencing NRIs’ decisions regarding long or short-term investments.

Commenting on the incognizance regarding the time framework of investments, Mudit Vijayvergiya, Founder, SBNRI said, “India has emerged as an attractive investment destination for NRIs, offering them an array of options and portfolio diversification. However, choosing between long-term or short-term investments can be exhaustive, from navigating geopolitical funnel, risk tolerance to tax implications, the investment diaspora is permeated by a confluence of factors.”

According to the survey by SBNRIs, 18 per cent of NRIs based in Canada prioritize retirement planning in their long-term investment strategies, followed by 16 per cent in the UK and 12 per cent in Singapore. Conversely, wealth preservation is a top consideration for nine per cent of NRIs in Singapore, compared to only two per cent in the UK and one per cent in Canada. Moreover, the report indicates that a mere four per cent, three per cent, and one per cent of NRIs from Canada, the UK, and Singapore, respectively, emphasize education funding when making long-term investment decisions.

In this context, the SBNRIs report discloses that eight per cent of NRIs in Canada embrace an aggressive risk tolerance, while only eight per cent of NRIs from both the UK and the US share a similar inclination in long-term investments. In contrast, four per cent of NRIs from the UK prefer a more conservative risk tolerance, a sentiment echoed by 3 per cent of NRIs from both Canada and the US. Additionally, five per cent of NRIs across all three countries – Canada, the US, and the UK – choose a moderate risk tolerance when formulating their long-term investment strategies.

In the contemporary interconnected global scenario, the industrial landscape is notably influenced by worldwide economic trends and geopolitical considerations. Specifically, factors such as inflation, interest rates, and trade policies on a global scale can exert a substantial impact on investment decisions, thereby affecting industrial growth and innovation. Additionally, geopolitical tensions have the potential to disrupt supply chains and elevate input costs, posing obstacles to overall industrial expansion.

In line with this trend, the SBNRIs report indicates that 21 per cent of NRIs in Singapore, 15 per cent in Canada, and 11 per cent in other countries consider global economic trends and geopolitical stability as influential factors in their long-term investment decisions. Conversely, a small proportion—four per cent in Canada, three per cent in Singapore, and two per cent in other countries—do not prioritize geopolitical stability when shaping their long-term investment strategies.

Shifting the focus to short-term investments, the SBNRIs survey report investigates the significance of immediate liquidity as a key factor. Upon closer examination, the report highlights that merely one per cent of NRIs from both Australia and the UK, in contrast to three per cent from the US, regard immediate liquidity as a crucial determinant in their short-term investment choices. Nevertheless, the percentage rises to seven per cent for NRIs in the UK and six per cent for NRIs in both Australia and the US, indicating that a noteworthy proportion considers immediate liquidity an essential factor in their short-term investment decisions.

Taking into account the appealing opportunities that draw NRIs towards investing in India, the SBNRI report highlights the significance placed on tax implications when making investment decisions. Approximately 13 per cent of NRIs based in Canada, followed by nine per cent in the US and eight per cent in other nations, consider tax implications as an extremely important aspect. In contrast, a smaller percentage, with four per cent from Canada, one per cent from the US, and one per cent from other countries, does not assign any importance to understanding the tax implications on investments.

Certainly, India has positioned itself as a noteworthy investment destination for NRIs, and there are compelling reasons behind this. With the world’s fastest-growing major economy, the country appeals to investors seeking substantial returns. The Indian government actively fosters NRI investment through initiatives such as the Liberalised Remittance Scheme (LRS) and infrastructure development policies.

Consequently, the comprehensive survey underscores India’s remarkable advancements, illustrating the factors that influence NRIs’ choices in formulating both long-term and short-term investment strategies.