Trends in Indian Jewellery : It is not just gold but a lot more

Almost every established culture has used gold to symbolize power, beauty and purity. In India, gold jewellery has been used to celebrate marriage and during religious festivals. In the North Ornate bridal pieces are popular while in the South 22-karat yellow gold are favored. Indians happen to be the largest consumers of Gold in the world. Not surprisingly, the Indian diaspora and NRIs continue to be enamored by the yellow metal. GaramChai.com has extensive listings of Indian Jewelers across the North America.

A recent New York Times article (link) explores emerging trends in ethnic and contemporary jewellery designs in India that global Desis are sure to be paying attention to.  Traditionally, Indians would buy jewellery as an asset for a rainy day and for special occasion like marriage and festivals. Such purchases would involve a lot of research and consensus from the extended family.  The article highlights an emerging trend where Indian women are buying contemporary jewellery,  purely for joy and satisfaction rather than waiting for an occasion.

Another trend featured in the article is that jewellery made using silver and other material are designed for “daily use” and  doesn’t need to sit in lockers.

The article features Eina Ahluwalia (facebook), a jeweler and designer based in Kolkata, whose creations blend social activism, art, design and fashion- partly trying to counter what she calls ‘the patriarchal associations of traditional Indian jewellery.

 “ her 2011 Wedding Vows collection took a stand against domestic violence by using renderings of kirpans, the knives that are an important symbol of her Sikh identity, in necklaces and other pieces. The words “Love, Respect, Protect” were worked in gold into chandelier earrings and layered necklaces.”

That collection, she said, continues to be among her most successful, with its slogan “Accessorize the Warrior Within” resonating among customers. Her designs were inspired by traditional and personal narratives, like her Wordsmith collection that displayed the names for God in Urdu, Arabic and Hindi. These Jewellery prices start at about Rs 5,000 for a pair of shell-shaped earrings and rise to about Rs 25,000 for elaborate pieces. “

 

Image result for Eina Ahluwalia
Googled picture of Eina Ahluwalia

At first there was a cap to how much customers would spend in terms of price per piece,” she said. But, “over the years, the Indian market is exposed to so much more, and the customer base has significantly widened.” Today, unorthodox materials like concrete, wood, leather and found objects are used by many of the 60 designers whose work is showcased alongside Ahluwalia’s at Nimai, a concept jewellery store opened in Delhi by Pooja Roy Yadav in 2013.”

“Social media has been an invaluable tool to share these stories,” she said, “which would be near impossible in traditional retail formats, and very expensive and impersonal through conventional advertising and marketing.” Now designers, including Ahluwalia and Pittie, are creating collections suitable for bridal wear.

Featured links

 

PPF accounts to be closed, interest lowered to 4 per cent if you become an NRI

Non Resident Indians are continually looking for investment opportunities in India. A few weeks ago, we blogged about “NRIs for real estate investment in India – Know the simple Rules” The Government of Indian recently announced new rules under which select small savings schemes like Public Provident Fund (PPF) and National Saving Certificates (NSC) will not earn you the same rate if you become non-resident Indians (NRI).

A summary of changes to rules and what it means to NRIs:

  • NRIs will no longer be permitted invest in small savings schemes like NSC and PPF. In the past they were allowed to retain their PPF account if they had opened it before becoming an NRI.
  • PPF and NSC currently fetch an interest rate higher than bank savings rates. Some of it is subsidized by the Government of India. (Current rate of PPF is 7.8 per cent while Post Office savings account get 4 %)
  • PPF accounts would be deemed to be closed prior to maturity in case the holder becomes a non-resident Indian (NRI). The investor will be then paid interest at the rate applicable to Post Office savings accounts till the date the PPF account is closed.

The Indian government notification on PPF dated October 3 states,

“Provided that if a resident who opened an account under this scheme, subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed.”

The finance ministry notification adds:

“Provided that if a resident Indian having purchased a certificate, subsequently becomes Non-Resident during the currency of the maturity period, the certificate shall be encashed or deemed to be encashed on the day he becomes a non-Resident, and interest shall be paid at the rate applicable to the Post Office Savings Account, from time to time, from such day and up to the last day of the month preceding the month in which it is actually encashed.”

Other media accounts

The top Indian cities for NRIs to invest

Investing in Real Estate in India is a topic of perennial interest to NRIs. We frequently review NRI investment opportunities and ideas on this blog. A few recent blogs include:

Continuing the series, here is an extract from a recent article in The Hindu

Image: The Hindu

Indian real estate has always drawn the attention of Non Resident Indians (NRIs) simply because it is their country of origin.Indian real estate has always drawn the attention of Non Resident Indians (NRIs) simply because it is their country of origin.

Investing in realty, however, can be a little trickier when the buyer isn’t physically present. Although a lot of recent technological advancement such as virtual and augmented reality has made property buying simpler for NRIs, choosing the right city and location for the investment still requires considerable research before committing.
If you are an NRI looking for options to invest in Indian real estate, here are a few cities you could consider.

Mumbai – This bustling city continues to grow exponentially and due to this sole reason growth in peripheral areas is expected to be significant.

Hyderabad – Hyderabad is fast becoming the major IT hub in the country.

Bangalore – Bangalore continues to be a draw for IT/ITES employees with its pleasant weather and steady real estate market. Social infrastructure in the city is growing, and connectivity will reach greater levels with the completion of the next phase of the Metro system.

Chennai – Chennai realty is considered a safe investment simply because of the fact that there’s continuing demand for homes driven by the impressive industrial mix including technology, automobile, healthcare and manufacturing sectors. Areas in the southern part of the city are touted to be fast growing.


 

You may also be interested in the GaramChai.com section on Realtors 

NRIs : Is real estate in India not a good investment right now ?

NRIs continue to look for changes in policies with regards investing in Indian real estate (‘Flexible policies are the need of the hour’). Continuing from a recent post on “NRIs for real estate investment in India – Know the simple Rules”  here is an interesting article with infographic from Economic Times

Investments in property have earned insipid returns in the past few years. Find out why this trend is likely to continue for some time.

If you go by what real estate developers, housing finance companies and property agents say, this is the best time to invest in property. Or is it?

A recent research report by consultancy firm Knight Frank shows that home prices in eight major cities rose very tardily in the past three years.

In some markets, including the National Capital Region (NCR) and Kolkata, property prices have actually come down since 2014. Of course, this is not true for the entire real estate market. While prices have come down in some markets, some cities have witnessed a consistent rise. Within cities too, some pockets have done poorly, while others have flourished.

This is why ET Wealth assumed four different growth rates to see what investors can gain from real estate. We assumed that the buyer would put a downpayment of Rs 10 lakh and take a home loan of Rs 50 lakh (at 8.5%) to buy a property. Another Rs 6 lakh would be spent on legal costs and registration, taking the total cost of property to Rs 66 lakh.

How much will you earn from real estate Returns from property will depend on the expected rise in prices and could vary significantly across locations and cities. Here’s how much buyers would earn if property prices are assumed to rise at four different growth rates.

ET_Real_estate
A picture, worth a thousand words!

Assumptions: Buyer in 30% tax bracket. He earns monthly rent of Rs 10,000, which will rise by Rs 1,000 every year. Buyer also claims Rs 2 lakh deduction for home loan interest. IRR formula used for calculating returns. Home loan EMI is Rs 43,391 for 20 years at 8.5%

We then looked at the situation after three years. If the property prices rose by 3%, the investor would be in Rs 7.86 lakh in the red. Even though he earns rent (Rs 10,000 a month increasing by Rs 1,000 every year) and claims tax deduction (Rs 2 lakh) on the home loan, he pays 8.5% on the loan while the asset grows at 3%.

What would the investor have earned had he chosen to buy gold? Instead of the downpayment and legal costs incurred on buying the property, had he put Rs 16 lakh in gold and bought Rs 43,391 worth of the metal every month (the home loan EMI), his investment would be worth Rs 33.8 lakh in three years, assuming gold prices rose 3% every year.

Our calculation assumes that the buyer starts earning rent and saving tax from day one. If there is a delay in getting possession (not rare in the current situation), the returns would be lower. If property prices rise 6%, the investment would nearly break even in three years. But it would still be far less than Rs 36.2 lakh accumulated by investing Rs 16 lakh lump sum and a monthly investment of Rs 43,391 in a fixed income option that earns 6%.

Similarly, if property prices rose 9-12%, the investor would make money but still have less than what he could have earned from hybrid funds or equity schemes. As things stand, property prices are not likely to move up too much in the next couple of years.

The Knight Frank study does not paint a very rosy picture. The huge number of unsold units (more than 1.8 lakh in the NCR) and the long time taken to sell a property (up to 35 quarters in Faridabad) are worrying signs that point to a dull future. “Property is not likely to move up significantly in the next 2-3 years,” says Gulam Zia, Executive Director, Advisory, Retail & Hospitality, Knight Frank .

Source: Economic Times and India Real Estate study by Knight Frank.


You may also be interested in GaramChai.com Realtor and Return2IndiaSections.

NRIs for real estate investment in India – Know the simple Rules

NRIs continue to evaluate real-estate investment opportunities in India. A few months ago, we blogged about the need for streamlined and flexible policies (ref: “NRI investment in real estate: Flexible policies are the need of the hour”). It turns out that things are moving in the right direction. There is a lot happening on the legislative front. NRIs also continue to look for changes in policies (‘Flexible policies are the need of the hour’).

The Hindu has an interesting article “Must-know rules for NRIs for real estate investment in India

One of the most important considerations for an NRI investing in Indian real estate is understanding of the financial landscape. If you are an NRI looking to invest in a property in India, here are few things you need to keep in mind before you start looking out for properties:

Regulatory Act – If you have an Indian passport, you do not require any prior permission to make a property investment in India. The Reserve Bank of India has made the rules very simple to attract more foreign investment. Real estate transactions are governed by the rules under the Foreign Exchange Management Act (FEMA).

Types of properties to invest in – There is no restriction on the number of properties than an NRI can invest in. An NRI, as well as a Person of Indian Origin (PIO), can purchase as many residential as well as commercial properties in India as they want. However, there is a restriction on foreign investment when it comes to agricultural land, plantation property or a farmhouse. Such properties are allowed only in case they are inherited or gifted to the NRI in question

Financial transactions and funding – For any property investment in India, all the transactions should be done in Indian currency through Indian banks. One of the mandates is to have an NRI account in an authorised Indian bank.

An NRI can easily get funding for the purchase if his paperwork is clean. There are several NRI home loan schemes available under different financial institutions in India. If you are getting your property funded make sure that you have a minimum of 20% of the value of the property to invest from your own sources. You can take funding for a maximum of 80% of the value of the property.

All your transaction should be carried through Indian banking channels, so make sure to use your NRO/NRE account for all your inward remittances. You can also issue post-dated cheques or ECS from your NRE, NRO or FCNR (Foreign Currency Non Resident) account.

Before you approach the bank for funding, check that all your paperwork is clean and verified by a lawyer. Take a no-dues certificate from the seller if you are buying a property and if it’s inherited or jointly held, work to get the title cleared. Also, ensure that there are no pending bills or dues with any authorities.

Power of attorney – If you are buying an under-construction property, you will have to give power of attorney to your builder or a trusted associate. Take help from your lawyer to appropriately word the document so that there is no chance of forgery and your investment is secured while the property is being developed.

Tax benefits – As an NRI you can enjoy most of the tax benefits that an Indian resident is entitled to on purchase of property. You can claim a deduction of Rs. 1 Lakh under section 80 C on the Income Tax Act, 1961. If you sell the property within three years of purchase, it is considered as short-term capital gain, and the earnings through the property are taxable. If you sell the property after three years, you have the option of reducing the long-term capital gains tax by investing in another property.

The Confederation of Real Estate Developers Association of India (CREDAI) regularly organises exhibitions for NRIs where it helps them scan different investment options and offer spot loans from top banks. Easy investment options and reduction in down payment value are also offered. Therefore, it is important that you check all the offers from CREDAI before you invest in real estate in India.


 

You may also be interested in GaramChai.com Realtor and Return2India Sections.

Update on Investing in Real Estate in India for NRIs

Investing in Indian Real Estate is a perennial topic of interest to Non Resident Indians (NRIs), OCIs, PIOs and others. 

A few months ago, we blogged about the need for streamlined and flexible policies (ref: “NRI investment in real estate: Flexible policies are the need of the hour”). It turns out that things are moving in the right direction. There is a lot happening on the legislative front.

An Article in moneycontrol examines the Impact of RERA on NRIs investing in India property market 

The question now is whether NRIs can be more confident in making an investment decision with policy changes such as RERA and GST attract NRIs to Indian realty in 2017.

The government has largely addressed most of the above concerns by some of the key policy changes introduced in 2016, namely the Real Estate Regulation Act (RERA), the Goods and Services Tax (GST) and the Benami Transaction Act.

RERA or the Real Estate Regulation and Development Act 2016 (RERA) will ensure regulations in this largely unregulated market. The purchaser will be more protected and greater transparency in the sector will be visible. RERA will put accountability on the developers in terms of financial disclosure, timely development of projects and maintaining good corporate governance practices.

The Punjab state government has taken a lead by proposing to set up an ombudsman solely for NRIs. An Article in Times of India says 

“A lot of NRIs face problems either related to their property or other matters. They come to the state only for a short period every year and cannot afford spending long time dealing with legal problems. With the objective to redress their grievances effectively in a time-bound manner, the state is bringing a new legislation to create an Ombudsman for NRI Affairs,” the budget proposal states.

To further connect with Punjabi NRIs, the state government has unveiled “Friends of Punjab-Chief Minister’s Garima Gram Yojna” for the Diaspora.

There is certainly a demand from NRIs. Khaleej times examines how “More NRIs keen to make second property investment”

More NRIs in the UAE are now interested in securing an additional investment back home – there has been a rise of 110 per cent in this segment from 20 per cent last year to 42.12 per cent now.

This was revealed in a survey conducted by the organisers of the upcoming Indian Property Show among 10,000 UAE-based Indian expats.

There is an increase of about 45 per cent in people looking to buy homes in the budget range of Rs5.1 million to Rs7.5 million (Dh290,000 to Dh426,000) from 21 per cent last year to 30.48 per cent this year.

Although Mumbai, Chennai, Bengaluru, Delhi, Hyderabad and Pune remain the top favourite cities among the Indian community here, Kannur, Thrissur and Thiruvananthapuram have emerged as new destinations of interest.

“NRIs are crucial stakeholders of the real estate industry. In 2017, total NRI investment in realty in top eight cities is expected to touch $11.5 billion [Dh42.20 billion]. This will represent 20 per cent of the total market share, currently estimated at $60 billion [Dh220 billion],” said R. Srividya, general manager of corporate sales and brand engagement, Indian Property Show, Sumansa Exhibitions.

Endnote: You may also be interested in GaramChai.com section on NRI Real Estate

Observations of an absentee landlord in America

Indian Americans, NRIs and Indians in America may need to relocate for work or other family reasons.

Perhaps the biggest challenge facing those relocating: what to do with my house; Sell or rent? While selling one’s house is an option, some people might opt to retain the property and continue to build equity on it. In addition to equity, one can generate rental income that will compensate for the expenses. Absentee landlords generally engage the services of a trustworthy local property manager who can manage one’s property remotely.

Many NRIs also opt to retain their property in the US even after moving back to India and might rent it out via a property manager.

Greensboro

In a new section of GaramChai.com (link),  we present a first-hand account of an absentee landlord in America. Absentee landlord is an economic term for a person who owns and rents out a profit-earning property, but does not live within the property’s local economic region.