6. A Look at India
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Transcript of 6. A Look at India
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ASIA/PACIFIC & INTERNATIONAL REAL ESTATE
6. A Look at India
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GeographyPage 106
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Modern India
Economic Growth—surpassing China?
Growing Middle Class
Homeownership—86%
Subsidies and Rising Commodity Prices
Infrastructure issues
Spreading urbanization, crowded cities
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Monsoon Season
Torrential downpours
80% of the annual rainfall
June to August
Beneficial monsoon season bolsters the economy
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FDI
Top FDI Investors in India1.Singapore2.Japan3.United States4.United Kingdom5.Netherlands6.Cyprus* 7.Germany8.France9.UAE*
Top Sectors for FDI20%–Services
8%–Telecommunications
7%–Computer hardware and software
7%–Construction
7%–Housing and real estate
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India Diaspora
Your Next Client?United States: 2.2 millionCanada: 1 millionU.K.: 1.5 millionS. Africa: 1.2 millionMalaysia: 2 millionSaudi Arabia: 1.7 millionUAE: 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
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Determines flow of funds for real estate transactionsNon-Resident Ordinary Rupee Account (NRO)
Non-Resident External Account (NRE)
Foreign Currency Non-Resident Account
(FCNR)
Annual repatriation limit of US$1million
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
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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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Foreign Ownership?
May purchase a residence
Prior-year’s stay of 182 days required plus proof of intent to reside in India indefinitely
Foreign residents of Non-Indian Origin
Non-residents of non-Indian origin
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 practiceNo licensing Informal channels-homemakers, friends and
relatives, kiosk owners, and janitors National Association of
Realtors–India striving for professionalism nationwide MLS
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Doing Business In India
Beyond the Basics
IntroductionsWomen in BusinessBusiness CardsConversation Starters MeetingsDemeanorContracts and
NegotiationsA Few TaboosSocial Etiquette
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