Guernsey-headquartered Nerine Group, the only independent trust
company with an office in India, believes the sub-continent is on
the brink of an economic boom following the results of the election
in May and a renewed sense of investment optimism now sweeping the
Nerine India Managing Director Pranav Khanna said Nerine's
foresight had yielded a strong performance and he believed this
would be dwarfed by the economic activity expected under the new
government. Mr. Modi's pro-reform Bharatiya Janata Party (BJP)
won a historic mandate in the country's general election in May
emerging with 282 of 543 parliamentary seats to form a government
without having to broker a post-election coalition.
Mr Khanna said: "The new government has been greeted
extremely positively in India as it appears to be pro-foreign
investment and is setting an agenda for radical economic change. Mr
Modi's government has already increased the cap on foreign
investment allowed by non-resident Indians (NRIs) from $75,000 to
$125,000. Mr Modi is seen as pro-business and is softening the
ground to attract investment in large-scale building and
"Indians want to invest in India again. Six months ago most
Indians in a position to do so wanted to shift their money out of
India because of the economic and political uncertainty. Now they
are eager to put in place structures for wealth preservation,
investment and succession planning in India and also invest outside
the country, primarily in property in London, Dubai and Paris.
"While there had been strong talk of the introduction of an
estate tax, there has been no mention of this since the election.
However there remains a sentiment that this tax will be brought in
within the next year. This has spurred a desire by Indian investors
to purchase properties through trusts and to ensure they have solid
succession plans in place."
Mr Khanna said the biggest immediate change was that Indians
were making wills - something that had been culturally eschewed
"It is the beginning of taking a mature, measured approach
to succession planning both for Indian families and for their
businesses. Our clients are investigating a range of different
structures from trusts to educational structures for their
children, property portfolios and they are looking at private trust
companies for the businesses' succession planning. Nerine has
seen more enquiries in the past three months than those in the
previous nine months and there is a real impetus in India to get
the right structures in place," said Mr Khanna.
Nerine sponsored the 8th annual Indian seminar, 2014
Indian Elections - A Game Changer?, in London in June andDirector,
Mark Biddlecombe, attended. The event was chaired by Deepak Lalwani
OBE, the founder and director of Lalcap Ltd, a London based
consultancy specialising in doing business with India.
Mr Biddlecombe said the summit brought together a range of
leading economists, bankers and advisors to discuss India's
"India's GDP growth in 2014/15 is expected to be around
5.5% and recovery to 7-8% will take around two to three years. The
panel agreed a single window clearance for large projects - both
domestic and foreign direct investment could create investment
dynamism," said Mr Biddlecombe.
Mr Khanna added that the political and economic uncertainty in
the past had meant there were few independent wealth specialists
established in India.
"With Indians becoming increasingly sophisticated in terms
of wealth structuring, it is this independence in the advice and
expertise and a track record locally that Indian families and
businesses are seeking. There is scepticism towards banks and
financial institutions believing that the institutions' main
focus lies of boosting their assets under management and not on the
tailored, specific structuring needs of the client.
"Banks are not interested in taking on a trust that does
not have liquid assets whereas independent specialists understand
the complexities and differences of individual and familial needs,
not to mention the cultural influences, and tailor their solutions
accordingly. It also helps if the independent wealth specialists
have both onshore and offshore experience given the new drive to
seek solutions domestically and internationally."
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