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Indian assets deliver 8.5% to 9% real returns in USD

Consumer—By NRI2Global Desk—
Indian assets deliver 8.5% to 9% real returns in USD

Indian equities (Nifty 50) and tier-1 real estate report nominal annual gains of 12% to 14% in rupees.

The Indian rupee depreciates about 3% to 3.5% yearly against the U.S. dollar, bringing net returns to roughly 8.5% to 9% in USD terms.

Indian NRE Fixed Deposits advertising a 7.2% yield return about 3.8% net in U.S. dollars after currency erosion, below standard U.S. Treasury yields or high-yield cash accounts offering 4% to 5%.

Real estate investments in Hyderabad and Bengaluru face entry and exit costs of 6% to 8% in registration, stamp duties, and property management, lowering long-term net dollar compounding below 6%.

Over a decade, a $10,000 investment yielded about $15,700 in Indian FDs and about $26,500 in Nifty in USD, compared to over $31,000 in the S&P 500 without foreign exchange risk.

For Indian-origin investors in the U.S., nominal rupee returns on Indian equities, fixed deposits, and real estate are offset by currency depreciation and transaction friction when calculated in U.S. dollars.

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