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Independence spurs India - 16 August 2007

This week has seen celebrations of the 60th anniversary of India’s independence from British Empire rule, and at the same time the property market in India is providing increasing opportunities for investment as cities and businesses grow quickly.

Booming IT and outsourcing industries are making investment in city-based real estate hugely popular, and as the rules on Foreign Direct Investment (FDI) have recently been relaxed, the market is now open to a far wider spectrum of people than it was previously.

Construction is widespread in the major cities, and as the knowledge and skills base of the population grows, so they are able to afford to live in the luxury apartment projects and shop in the new commercial centres that are springing up.

Investment opportunities are most open for groups who are classed under the acronyms NRI (Non-Resident Indians) and PIO (Persons of Indian Origin), who are able to obtain finance in order to purchase, and have greater freedom of choice. Other investors with no connection to India are currently not permitted to own property in the country, but may invest through foreign funds to be able to take advantage of the opportunities.

Growth is difficult to predict in a market as new and rapidly-changing as this, but the economy is currently growing at between nine and ten per cent per year, while mortgages account for just three per cent of the GDP, compared to around 50 per cent in the most developed Western economies. This suggests that there is plenty of room left for growth in the market.

In any case, it opens up the market for buying in India a little further than the leasehold Goan properties that have constituted the market in recent years.

 

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