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NRI investing in Indian property? These safeguards help protect assets

Realty developers have to provide an annual self declaration of their project’s quality based on multiple parameters

Question: Many non-resident Indians (NRIs) are now investing in properties in India. Some are booking apartments in new projects. Are there any safeguards to protect their interests?

Answer: NRIs and persons of Indian origin who have taken up citizenships of foreign countries are investing in properties in India. According to a recent study, many Indian developers have reported a rise in sale of residential units to overseas Indians who now make up about 15 per cent of their new project sales. As a result, remittances to the country have picked up substantially with a major chunk of the investment being in real estate.

One of the important reasons for this interest in Indian properties is that laws are now in force to protect the interest of home buyers. Realty developers have to provide an annual self declaration of their project’s quality based on multiple parameters such as structural design, stability, testing, quality of input material, quality of workmanship and other crucial aspects. Further, the law safeguards the purchaser’s rights by making the developer accountable to rectify any structural or other defects within the initial five years.

Once these defects are brought to the notice of the developer, he is statutorily bound to rectify the same at his own expense within 30 days. If there is a delay in giving possession, the Real Estate Regulatory Authority can direct the builder to either refund the amount given by the buyer if he wishes to surrender his right in the project or to compensate him adequately for the delay. Even foreign citizens who are planning to return to India feel safe to do so after retirement. Therefore, non-resident Indians and overseas citizens of Indian origin are now investing in real estate property with a sense of comfort and security.

Question: I believe the gaming industry in India has registered an explosive growth. Is this boom likely to continue?

Answer: According to a recent report, the Indian online gaming market has seen a rapid expansion with the number of gamers rising from 250 million in 2018 to 400 million in 2021. Mobiles, laptops and desktops have become the new playgrounds and there has been a phenomenal increase in gaming influencers and content creators. Gamers meet on streaming platforms creating a new type of social bond.

Thus, the online gaming industry in India has seen a rapid expansion with a 28 per cent CAGR between 2020 and 2023. This is likely to be sustained with a 15 per cent CAGR in the coming years. This sector has attracted significant foreign and domestic investments and generated substantial direct and indirect employment opportunities.

However, the online gaming segment in India currently constitutes just 1.1 per cent of the global online gaming revenue which crossed US $300 billion in 2021. While the pandemic in 2020 saw a surge in personal gaming setups, gaming cafes have now become an integral part of the industry. These cafes serve as vibrant hubs where gamers compete with friends offering an environment rich in companionship and shared passion. This shift signals a cultural change in India amongst the youth where gaming is not only a form of entertainment but a career option for aspiring Indians.

Question: Export of goods from India has declined recently. This does not augur well as the trade deficit is already on the rise. Are any steps being taken to address this issue?

Answer: There was a nine per cent fall in exports in August on account of logistical problems. The government has therefore swung into action by initiating a series of measures. The Shipping Corporation of India is proposing to enhance its capacity by purchasing five additional vessels. Shipping lines have been requested to operate more services from Indian ports, which have successfully reduced the turnaround time. Further, container ships are being chartered to significantly increase capacities. Concor, which is a government-run enterprise, has reduced container handling fees. It has also made available its facilities for use as empty yards which will also be GST registered. Further, to reduce queues at ports, notably Jawaharlal Nehru Port Terminal which handles container ships, authorities have been advised to install more scanners. In order to speed up clearance of export cargo, customs have been asked to review its risk-based assessment mechanism. Railways have also been requested to do away with the 10 per cent peak season surcharge. All these initiatives will help to increase the flow of exports from India and keep the trade deficit in check during this financial year.

HP Ranina is a practising lawyer, specialising in corporate and tax laws of India.