The Change in Money to India Exchange Rate Affects the Density of Transfers

Devaluation of Rupee against dollar is best time for the Non – resident Indian (NRI) who wants to invest or transfer money to their relatives. If in today scenario, they send money or invest money in India they are at profit side. Earlier one USD dollar sent to India was fetching around Rs. 56 in the month of June’13 and now it is Rs 64 against one dollar in the month of August’13. So the NRI’s are making profit of Rs. 8 in each dollar sent to India.

This is the good opportunity for the new NRI investor to invest in India’s real estate. But at the same problem for the NRI’s who have already invested in the real estate. The NRI’s who have invested in India to gain the high returns are suddenly finding that their profit is eaten away. If we take an illustration, Mr. A (non – resident Indian) have invested in real estate around USD 2 million 3 years back, he had purchased a property of Rs. 8-9 crore ($1 = Rs. 45). And now due to fall in dollars the same 2 millions will fetch them only Rs. 12.5 crore ($1 = 64.30). Inspite of fact the real estate is rising consistently in India. But due to fall in rupee, the return of NRI has been fallen to 10-15 percent as per the money to India exchange rate.

The NRI’s who have taken the property on EMI for them also the devaluation of rupee is profitable and so the number of NRI money transfer will increase gradually during this phase. For example, An NRI paying monthly installment of Rs 40000 on a home loan, three years back he was liable to pay $ 908 every month. But now he is liable to pay $ 625 which save his around $ 250 dollar per month. In the same manner, if the NRI transfer the money $ 1000 to his relative every month, 3 months back his family used to Rs. 56000 per month but now on transferring $ 1000 his family will get Rs. 64000. The profit or will fetch Rs. 8000 more to his family. For a new NRI investor, the market is also profitable. As the devaluation of rupee will allow the NRI’s to get more property by investing few dollars considering the money to India exchange rate.

The real estate market of India are optimistic and expecting that they will be more sale in this year due to devaluation of rupee. A survey was conducted by and Industry of India (Assocham), the survey was done with 1250 real estate developer from the state like Mumbai, Kolkata, Bangalore, Delhi Chennai etc. The result of that survey was that the NRIs have started buying or investing in real estate more due to favorable exchange rates. On the bases of inquires received by the NRIs to the property dealers, expecting 35% of increase in business from the NRIs while doing nri money transfer.

The paper released by the Assocham paper on 'Falling rupee sparks property boom from NRIs', D S Rawat, secretary general Assocham said, "With the rupee riding low against the dollar, Indian residents are looking to accelerate investment plans back home".

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