80% overseas Indians investing in country, finds HSBC report

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NEW DELHI: HSBC today said that almost 80 per cent of overseas Indians are making investments in the country and that a large chunk of them expect to increase the quantum of such investment significantly over the medium term.

In a report titled the Global Indian Pulse, which uses a sample size of 4,152 respondents over 9 markets, HSBC wrote that a 32 per cent of third generation global Indians intend to increase their investments in India by a “great deal” over the next three years.

The markets which were taken into consideration are the US, Canada, UK, UAE, Saudi Arabia, Hong Kong, Malaysia, Singapore and Australia.

According to the report which was partnered with global market research firm IPSOS MORI, overseas Indians’ key target area for investments in their country of origin over the next two years is sustainable investment, with 76 per cent saying that environmental or social initiatives and funds were major investment drivers.

Skills development, recycling, solar/ wind power generation and electric cars are their top choices, the report said.

The report says that private equity is now strongly coming into India, especially in sectors such as technology and this has been aided by the fact that Indian Americans who have achieved success in the US have subsequently moved into finance, adding that the number of Indians in private equity and venture capital had increased significantly from a decade ago.

“We asked global Indians planning to make sustainable investments what would stop them from doing so. We see the same obstacles in India and countries of residence. The top barrier is having more important places to spend their money and concerns about returns is another factor,” the report said.

The third generation of global Indians would be more motivated to aid the country’s economic recovery after the pandemic than other generations – 32 per cent as against 26 per cent of first and second generations, it said.

“As the world transitions from carbon dependency, there is a huge economic opportunity for India because it has a less entrenched industrial and manufacturing set up to repurpose,” Pranjul Bhandari, Chief India Economist, HSBC said in the report.

While painting an optimistic picture about India as an investment destination, the report did warn that if Indian investment portfolios did not offer among the best returns adjusted for risk, overseas Indians could choose other investment destinations.