Wealthy Indians Expected To Invest Up To US$20 Billion Annually In Foreign Countries Under New FEMA ODI And OPI Framework

(MENAFN- Mid-East Info) Nisus Finance Chairman Amit Goenka says liberalised capital rules and deepening UAE market maturity are accelerating outbound Indian investments

Wealthy Indians are expected to invest up to US$20 billion annually in foreign assets by way of equity contribution in the UAE, enabled by the latest regulatory framework under the Foreign Exchange Management Act (FEMA), according to Amit Goenka, Chairman and Managing Director of Nisus Finance. The revised guidelines governing Overseas Portfolio Investment (OPI) and Overseas Direct Investment (ODI), introduced by the Reserve Bank of India (RBI), have opened new avenues for outbound investment.

ODI by Indian entities falls under FEMA, which regulates all capital account transactions involving foreign exchange, including cross-border investments. The RBI's updated framework provides greater clarity and flexibility for Indian investors seeking to expand their global footprint.

Under the Automatic Route, Indian entities can invest abroad without prior approval from the RBI if the investment is within 400 percent of the entity's net worth. The ceiling applies to all ODI transactions made by the entity, including loans and guarantees. Under this route, businesses can make financial commitments to their foreign Joint Ventures (JVs) or Wholly-Owned Subsidiaries (WOS) through an Authorised Dealer (AD) bank, provided they meet certain conditions set by the RBI.

According to Ernst & Young, India's outbound investments recorded a sharp increase of 67.74 percent, rising to US$41.6 billion in FY2024-25 from US$24.8 billion in FY2023-24.

“The Liberalised Remittance Scheme (LRS), introduced by the Reserve Bank of India, allows resident individuals to remit up to USD 250,000 per financial year overseas for a wide range of permitted purposes, including education, travel, investments, and medical treatment.”

In addition to ODI in individual investors, LRS is becoming more popular, the RBI has reported that outward remittances under the liberalised remittance scheme (LRS) reached a new peak of US$29 billion during the April 2023-February 2024 period. This figure represents a significant increase of 21.7 percent compared to the same timeframe in the previous year.

“We believe, in the coming months and years, more and more affluent Indians will invest in foreign equities and assets and we estimate this to jump to US$20 billion annually in the coming years,” Amit Goenka, Chairman and MD of Nisus Finance, said.

“Indians are already the largest foreign investor group in the UAE economy, especially in the real estate sector, businesses and industries. We anticipate more Indians will invest in the UAE economy, due to the liberalisation in foreign investment rules.

“The UAE real estate market comprises almost US$680 billion worth of assets and annual sales today. Real estate transactions alone reach 226,000 in 2024, with a combined value of AED761 billion (US$207 billion), a 36% y-o-y growth in volume and 20% rise in value. The sector recorded 217,000 investments valued at AED526 billion (US$143 billion), reflecting impressive growth rates of 38% and 27% in number and value respectively. Furthermore, Dubai attracted 110,000 new investors to its real estate sector, achieving a remarkable 55% increase. We see that the total amount of funding required each year to continue this pace of growth is in excess of US$100 billion. The balance money obviously comes from equity plus off-plan sale.

“So US$100 billion the current funding gap and the biggest challenge today, which is only widening with time. While the traditional capital sources can fill 30% while the remaining 70% remains untapped. This is where the opportunity lies. So, the need for private capital, private credit, private equity to part fund these developments is very critical to continue the current pace of growth.”

Nisus Finance, through its dedicated fund NiFCO, is addressing this challenge by focusing on affordable housing markets such as Jumeirah Village Circle (JVC) and Al Furjan. Goenka noted that 95 percent of new real estate growth is now occurring in the affordable housing segment, which continues to attract strong investor interest due to its consistent demand. Yet, the problem is not just in housing; the market itself remains underdeveloped from an institutional finance perspective.

The depth of the funding market is still lacking. While foreign direct investment and off-plan sales partially bridge the gap, the participation of banks and financial institutions in real estate funding is minimal.“Until recently, no major banking players were involved beyond mortgage lending or construction finance,” Goenka explained.“But that is beginning to change. We're now seeing non-banking finance companies and private credit players enter the scene. However, their cumulative investments are still significantly short of annual capital requirements.”

In parallel, the investment ecosystem is being transformed by technological innovations. Dubai Land Department's real estate tokenisation pilot project aims to drive Dh60 billion in tokenised real estate transactions by 2033, marking a new era of digital asset investment. Goenka predicts tokenisation will become a mainstream asset class as according to Boston Consulting Group, the tokenized asset market could reach US$16 trillion by 2030, with real estate as one of its biggest segments. Nisus Finance is actively aligning its strategy with these trends, incorporating PropTech, AI, and blockchain into its asset evaluation and fund management processes.

The attractiveness of the UAE extends beyond real estate. Geopolitical shifts, particularly in the US and China, are causing manufacturing and industrial operations to pivot toward the Gulf. The UAE, along with Saudi Arabia and Oman, is rapidly becoming a hub for global logistics, light manufacturing, and warehousing. Goenka highlighted that authorities across Dubai, Abu Dhabi, and the Northern Emirates are offering single-window clearances, business licenses, land parcels, and financing to investors making the region highly competitive for setting up manufacturing infrastructure.

This surge in economic activity is also driving population growth. With the UAE's Vision 2040 targeting a population of 13.6 million, up from the current 10 million, the need for housing, infrastructure, and logistics will rise sharply. In 2024 alone, over 4,300 Indian ultra-wealthy families relocated to the UAE, bringing an estimated US$5 billion in investable assets with them. Their migration is not just increasing demand for luxury homes and schools, but also bringing along business talent, back-office teams, and service ecosystems, creating a multiplier effect on the economy.

As the capital inflow intensifies, UAE's regulatory bodies like the DIFC and ADGM are evolving to accommodate global capital more efficiently. Institutional confidence is at an all-time high, with international pension funds, sovereign wealth funds, and investment giants such as Blackstone and Brookfield now entering the UAE market.“We are witnessing a shift from legacy family capital to professionally managed global capital,” Goenka said.“This is a sign of market maturity, not a slowdown.”

Looking ahead, Goenka estimates the UAE's REIT market, currently just US$7-8 billion in size, could grow exponentially within the next five to seven years – mirroring the transformation seen in markets like Singapore and the US. Meanwhile, Nisus Finance is targeting US$1 billion in investments through its own platform and partnerships, gradually bridging the capital shortfall and helping sustain the real estate boom.

The convergence of liberalised Indian outbound investment, UAE's visionary leadership, and deepening financial infrastructure suggests that the next phase of global real estate growth may very well be anchored in the Gulf. And as Goenka concluded,“The opportunity is here, the capital is ready. It's now about connecting the dots.”

About Nisus Finance:

Nisus Finance Services Co. Ltd. NiFCO is a leading, publicly listed real estate investment firm headquartered in India, with a proven track record of delivering high-yield, performance-driven assets across the country. In line with its global expansion strategy, NiFCO has extended its investor outreach across Southeast Asia, Europe, and the Middle East, bringing its deep sector expertise and innovative financial solutions to the UAE and broader GCC region.

As part of this regional growth, NiFCO has launched the“Nisus High Yield Growth Fund Closed Ended IC”“Fund”, a DIFC-registered Property Fund and Qualified Investor Fund, incorporated under the laws of the Dubai International Financial Centre DIFC. The Fund is an incorporated cell of Gateway ICC Limited and is advised by Nisus Finance Investment Consultancy FZCO“NiFCO Dubai”, located in Dubai, UAE. Gateway Investment Management Services (DIFC) Limited has been appointed as the Fund Manager.

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