NRI Deposits Surge in Gujarat as Global Uncertainty Drives Investment into Indian Markets
Amid global economic and geopolitical instability, the Indian equity market has emerged as a stable investment destination, attracting funds from domestic investors and non-resident Indians (NRIs). According to data from the State-Level Bankers' Committee (SLBC), NRI deposits in Gujarat have surpassed ₹1 lakh crore in the second quarter of FY25, registering a 14% growth from the same period in the previous year. The total deposits rose to ₹1.01 lakh crore, up from ₹89,057 crore in Q2 FY24.
A senior official from SLBC Gujarat attributed this surge to several factors. "As geopolitical tensions rise globally, many NRIs see Indian banks as a safe place to park their funds. These remittances are often directed towards investments in real estate and other sectors," the official stated.
In addition to this, the Indian stock market has seen a bull run, particularly between September and October, which has further fueled NRI investments. Many NRIs have been investing through mutual funds and direct stock purchases, showing increasing confidence in India's economic growth story. "NRIs are looking for more opportunities to create wealth, which is why we have seen a rise in remittances," the official added.
Vaibhav Shah, Director of the Association of National Exchanges Members of India (ANMI), highlighted the strong performance of Indian equity markets, particularly since the COVID-19 pandemic. "Despite global economic challenges, India's economic outlook remains positive. NRIs investing in Indian equities have seen good returns, which is why more NRIs are participating in India's growth story," said Shah.
Bankers also point out that the depreciation of the Indian Rupee against foreign currencies such as the US Dollar, British Pound, Euro, and Australian Dollar has led to higher realizations for NRIs in rupee terms. "Due to the devaluation of the rupee, NRIs are getting better returns when they convert their foreign currency into Indian Rupees," said a banking source.
The growth in NRI deposits in Gujarat is the highest recorded for the second quarter in the past four financial years. One of the key factors behind this surge is the attractive interest rates offered to NRI depositors. "NRIs can earn interest rates of at least 6%, which has further incentivized them to invest in Indian banks," added a banker.
As the Indian economy continues to show promise despite global challenges, NRIs are increasingly turning to India as a preferred destination for their investments. With the continuing rise in NRI deposits and investments, India’s financial sector is poised to benefit significantly from the growing confidence of its overseas diaspora.
