An Essay on NRI (Non-Resident Indians)

Non-resident Indians are Indians who live in foreign countries, but still continue to hold Indian nationality. Since India is a country with a developing economy, its need of foreign exchange is great and continuing, with the result that the country is the largest borrower in the foreign market. This problem of foreign exchange can be easily solved, if non-resident Indians are induced to invest in India. That is why only recently the government appealed to them to invest liberally in the industries of their motherland.

Don't Quote Me: August 2011

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The result was that a number of non-residents invested large funds in Indian industries. However, such investments carry with them their own problems. These problems were highlighted by the case of Swaraj Paul, a London based industrialist. He invested huge funds and purchased a majority of shares of a number of D. C. M. concerns as well as Escorts ltd. the Indian industrialists raised a hue and cry at this, for they felt that non-residents, like Swaraj Paul, were out to destabilize Indian industries and acquire control over their management. The problem was discussed acquire control over their management. The problem was discussed threadbare by leading industrialist and economists so that it became clear that the problem needs cautious approach, and clear understanding.

Investment by non-residents certainly the provides the country with the much needed foreign exchange. But it is fraught with a number of dangers. In no case, should the founding fathers of the Indian industries be allowed to be pushed out. They have contributed a lot to the economic well-being of the country, and whatever may have been their faults, their services to the country are not being forgotten. Any attempt to destabilize existing arrangements is to be resisted. Cars must also be taken to see that the flow of foreign capital does not increase the already high level of inflation.


In short, the investment by non-residents is to be welcomed, but only within reasonable limits. It would certainly help the country in augmenting its foreign exchange reserves and also in technological and industrial advancement of the country. But unlimited Non-Resident investment in bound to have serious economic and psychological consequences. Such adverse impact is to be avoided at all costs. A judicious and balanced approach to the problem is called for. Cautious approach in this connection is a must.

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