[ecis2016.org] With visa norms and immigration policies being tightened under President Trump’s administration, we examine the impact it will have on the Indian workforce in the US and concurrently, on the real estate sector in India
With Donald Trump taking over as the President of the United States, there have been some notable changes that have impacted the Indian diaspora in the US, especially in terms of legal immigration reforms and the HR392 bill. The US’ legal immigration rules are such that Indians often have to wait for 10 years, for EB3 (Green Card for professionals). This results in a very high number of Indians living in the US on work visas, with children born there, as citizens of the country.
You are reading: Will President Trump’s immigration policies fuel NRI demand for Indian real estate?
Sam (name changed on request), a manager with an IT company in the US, admits that many NRIs are losing hope of making the USA, their permanent home. “IT companies are trying to minimise their dependency on visas and many employers have also stopped H1B visa avenues for employees. Changes in the IT sphere are addressed by large IT employers. However, NRIs who are not ready for emerging technologies, will lose out. Also, the inability to start one’s own business, is a crucial factor for NRIs. Consequently, several NRIs have postponed or altogether stopped major investment plans, like buying a house, in the US and are now considering options in India. The Indian government’s recent policy initiatives, are also considered attractive for the long run. Employment opportunities, better work-life balance (less commute time), good schools and security, are key the factors that returning NRIs consider, while investing in real estate,” he explains.
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Mayur Shah, managing director of the Marathon Group, says that the Trump administration’s ‘America first’ policy of economic nationalism and tightening of H1B visas, have definitely caused apprehension among the resident Indian community in the US. “A large number of H1B visa holders in the US are Indians. The current US government’s views on immigration, could lead to several Indians moving back to India, or at least investing in property back home, as a back-up. Although there has been an increase in queries for home purchase by NRIs, it may be too soon to predict a mass exodus of Indians from the US,” Shah adds.
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Factors that aid or discourage NRI investment in Indian realty
One factor that may discourage NRIs from retuning, is that salaries in India are still low, compared to the US and other developed countries. Moreover, employment generation in India has also slowed down, according to recent reports. Nevertheless, many NRIs are pinning their hopes on the versatile opportunities in the Indian job market, such as the start-up sector and companies with promising ideas.
Another reason that is convincing NRIs to pin their hopes on India or investing in a home here, is the automation and shift in the technology landscape, which is resulting in structural changes within IT service companies and even outside such companies. If companies keep investing in newer technology, automation and improving efficiency, India will be preferred destination for IT services and business process outsourcing.
Segments that will be most affected by Donald Trump’s policies
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Ramesh Nair, CEO and country head, JLL India, points out that the Trump administration’s policies will not affect all IT professionals. Only a certain section of them – the lower rungs on the IT pay-scale – will be affected, while Indians employed in other sectors in the US will not be affected, he says.
“In fact, the ‘creamy layer’ of business people and highly educated and trained people, have more reason than ever to stay in the US now, given that they have emerged as a preferred segment. As a trend, NRIs, who will at some point be returning to India, tend to have made their property purchases within the country well in advance. Those who are now being edged out by the Trump administration’s visa policies, would probably not have sufficient time or opportunity, for such planning. As such, the ‘returning’ demand for properties in India may be slightly misunderstood and over-hyped. That said, people coming back on account of Trump’s policies, who have sufficient capital, will look primarily at their cities and towns of origin. The south Indian markets of Chennai, Kochi and Coimbatore, would have a fairly large representation of such demand,” Nair elaborates.
What do NRIs investing in India look for?
Shah, however, feels that the changing global political and economic scenario, will prompt more expat Indians to invest in real estate in India. “The economic and infrastructure development in India, have largely improved the prospects for the real estate markets in key cities like Mumbai, Thane and Navi Mumbai. These cities offer luxury projects from reputed developers, with the latest amenities and facilities that are at par with international standards. Such projects promise handsome returns. The recent revamping of India’s housing policies and regulatory laws, have also boosted consumer confidence, thereby, encouraging NRIs to invest in India,” adds Shah. With greater savings and immigration issues preventing them from making big investments in the US, Indian real estate may well find favour among NRIs looking for properties for self-use or appreciation in rates.
Source: https://ecis2016.org/.
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Source: https://ecis2016.org
Category: Lifestyle
