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An Investors Guide to India

By: Karl Hopkins

India is a vast country (3.3m square kilometres) with a vast population (1.1bn people), two thirds of which lines in rural locations. Bounded by the Himalayas to the north, it occupies a natural subcontinent.

India shares common borders with China (Tibet), Bhutan and Nepal to the north, Pakistan to the north-west, and Burma to the north east. To the east, almost surrounded by India, is Bangladesh. Near India's southern tip, across the Palk Strait, is Sri Lanka.

The country has 28 states which vary greatly in size, population and development. Each has its own government. There are also seven Union Territories with their Lieutenant Governors or Administrators.

The official language is Hindi, written in the Devanagari script. It is spoken by close to a third of the population as a first language. English is an 'associated language'. In addition there are 18 official state languages.

India has benefited greatly from the 'global economy' and the IT revolution and besides its traditional heavy industries, is now a major player in IT and software development, and call centre outsourcing. Even so 350m people remain in poverty.

India's largest cities are Mumbai (formerly Bombay), Delhi, Kolkata (formerly Calcutta), Chennai (formerly Madras), Bangalore, and Hyderabad.

The Foreign Office warns that there has been continued violence in the Kashmir Valley between armed groups seeking secession from India and against all travel to or through rural areas of Jammu and Kashmir (other than Ladakh), and all but essential air travel to Srinagar. It says there is a high level of conflict and terrorist violence in Jammu and Kashmir (excluding Ladakh). 'Jammu City is somewhat safer but attacks still occur'.

It also advises against all travel in the immediate vicinity of the border with Pakistan other than travel across the international border at Wagah, and against all but essential travel to Imphal (by air) and against all travel in the rest of Manipur and Tripura. 'Kidnapping, banditry and insurgency are rife throughout the north eastern region, particularly in Assam'.

Even in Mumbai British Nationals are advised to take care and avoid demonstrations.

'There is a high threat of terrorism throughout India', says the Foreign Office. 'Attacks have targeted public places, including places of worship. They could also target places frequented by expatriates and foreign travellers'.

However, 'over 600,000 British tourists visit India every year' and most are trouble free.

Between the months of December and April, flights leaving India become very full. Passengers may find themselves 'bumped off' flights even if they have confirmed seats. All international departures must therefore be re-confirmed at least 72 hours before departure.

The Foreign Office warns that penalties for possession of drugs can be severe. The penalties paedophile offences are also severe. And visitors to India should also be aware that Indian family law is very different from UK law and particular caution is needed when, for example, child custody becomes an issue.

There are health risks with seasonal outbreaks of some illnesses. Local medical facilities are 'not comparable to those in the UK, especially in more remote areas', says the Foreign Office. 'However, in the major cities private medical care is available, but is expensive'.

Travellers to India must obtain a visa before travelling. Foreign nationals arriving in India on long term multiple entry visas are required to register with the nearest Foreigners Regional Registration Officer within 14 days of arrival.

Overstayers are fined and may be prosecuted or detained and later deported. They may also need to appear in person at the Ministry of Home Affairs in Delhi.

Investors are strongly advised to seek legal advice before putting money into immovable property or businesses in India. 'There have been several cases where verbal agreements were reneged on and loopholes in agreements exploited to their disadvantage', says the Foreign Office.

Indian visas do not give any right of abode. This comes with Indian citizenship. However, people resident outside India who are 'or foreign nationals who are 'Persons of Indian Origin' may acquire property subject to compliance with the Foreign Exchange Management Act (FEMA), 1999 and related regulations.

Under the Act a person resident outside India can hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if acquired, held or owned when that person was a resident in India or it was inherited from a person who was a resident in India.

Further any 'Non-Resident Indian' or 'Persons of Indian Origin' may acquire immovable property in India other than agricultural land or, plantation property or farm house subject to obtaining the prior permission of the Reserve Bank.

Only short leasehold (under five years) property is exempt.

In addition to these restrictions state laws may impose other stipulations. For example, in the former Portuguese colony of Goa, now a state within the Republic of India, there are strict rules governing the purchase of property non-Indian nationals.

'Please ensure that you are familiar with the provisions of the Foreign Exchange Management Act 1999 and the most recent instructions issued by the Reserve Bank of India before entering into any property purchase agreement', says the Foreign Office.

'If the purchase is judged to violate local laws (including if you purchase whilst on a tourist visa), you are likely to lose all the money you have put in to the purchase, and may even face possible prosecution from the State. It is wise to engage a reputable local lawyer for advice before approaching estate agents or private vendors'.

About the author:
A focus on investment property India is just one of a wide variety of dedicated country focus sections that can be found at Fly2let.net the free unbiased resource for overseas property investors. For UK buy to let investments visit Residentiallandlord.co.uk.

More Finance information like Karl Hopkins's at Credit-Voitures.com

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