Wealthy Indians are expected to channel as much as $20 billion annually into overseas markets, with the UAE standing out as the top beneficiary, following the introduction of a more liberalised framework for outbound investment under India’s Foreign Exchange Management Act (FEMA).
The revised guidelines, covering Overseas Direct Investment (ODI) and Overseas Portfolio Investment (OPI), have widened the scope for capital mobility and are set to deepen India’s financial linkages with the Gulf.
According to Amit Goenka, chairman and managing director of Nisus Finance, the regulatory changes mark a turning point for Indian high-net-worth individuals (HNWIs) and corporates looking to diversify their asset base. “We believe, in the coming months and years, more affluent Indians will invest in foreign equities and assets, and we estimate this to jump to $20 billion annually,” Goenka said.
“Indians are already the largest foreign investor group in the UAE economy, especially in the real estate sector, businesses, and industries. With liberalisation in foreign investment rules, the UAE will attract even larger flows.”
The updated framework enables Indian entities to invest abroad under the Automatic Route without prior approval from the Reserve Bank of India (RBI), as long as investments remain within 400 per cent of their net worth. This makes it easier for companies and investors to pursue global opportunities. India’s outbound investment surged 67.7 per cent in FY2024-25, reaching $41.6 billion compared to $24.8 billion in the previous year, according to Ernst & Young.
Alongside institutional flows, individual remittances have also climbed. The RBI’s Liberalised Remittance Scheme (LRS) enables residents to remit up to $250,000 annually for purposes such as education, travel, healthcare, and investments. Outward remittances under LRS reached a record $29 billion between April 2023 and February 2024, up 21.7 per cent year-over-year.
The UAE is already one of the largest magnets for this capital. Its $680 billion real estate market is experiencing record momentum, with transactions reaching Dh761 billion ($207 billion) across 226,000 deals in 2024, marking a 36 per cent surge in volume and a 20 per cent increase in value. Dubai alone attracted 110,000 new investors last year, a 55 per cent increase, highlighting the depth of appetite for property. The sector, however, faces an annual funding requirement of more than $100 billion to sustain its pace of expansion.
Goenka believes this creates a critical role for private capital. “While traditional sources can meet only about 30 per cent of the funding needs, nearly 70 per cent remains untapped. This is where private credit, private equity, and alternative finance can play a decisive role,” he said. Nisus Finance, through its NiFCO fund, is already backing affordable housing clusters such as Jumeirah Village Circle and Al Furjan, which account for 95 per cent of new housing demand.
At the same time, Dubai is experimenting with tokenisation as part of its real estate innovation strategy. The Dubai Land Department is piloting projects expected to drive Dh60 billion worth of tokenised real estate transactions by 2033. With Boston Consulting Group estimating that the global tokenised asset market could expand to $16 trillion by 2030, Goenka believes real estate tokenisation will become a mainstream investment class. Nisus Finance is aligning its strategy accordingly, integrating blockchain, AI, and PropTech into its asset management.
The UAE’s attractiveness is not limited to property. Broader geopolitical shifts, including the diversification of supply chains away from China, are positioning the Gulf as a hub for logistics, light manufacturing, and warehousing. Authorities in Dubai, Abu Dhabi, and the Northern Emirates are aggressively offering single-window clearances, licenses, and land parcels, enhancing competitiveness for global manufacturers.
These trends are underpinned by the UAE’s Vision 2040, which aims to increase the population to 13.6 million from its current 10 million. Demand for housing, schools, infrastructure, and healthcare is expected to increase significantly. The migration of wealthy Indian families is adding to this momentum. In 2024 alone, over 4,300 Indian ultra-wealthy families relocated to the UAE, bringing with them an estimated $5 billion in investable wealth. Their arrival has fueled demand not only for luxury homes but also for services, talent, and back-office ecosystems, creating a multiplier effect on the economy.
Institutional participation is also rising. Global heavyweights such as Blackstone, Brookfield, and sovereign wealth funds are increasingly active in the UAE, reflecting confidence in its regulatory landscape. Free zone authorities, including the DIFC and ADGM, are adapting frameworks to welcome global capital, while the local REIT market, currently valued at $7-8 billion, has the potential to grow significantly in the next decade, mirroring trajectories seen in Singapore and the US.
“The UAE’s real estate market is evolving from legacy family capital to professionally managed global capital,” Goenka observed. “This is a sign of market maturity, not a slowdown.” Nisus Finance is targeting $1 billion in investments through its own platforms and partnerships, aiming to help bridge the capital gap and sustain growth.
As the convergence of India’s outbound capital liberalisation, UAE’s market depth, and institutional innovation gathers pace, analysts expect the Gulf to emerge as a central hub for global real estate and industrial investment.
- India
