Top sectors UAE NRIs can invest in and reap long-term gains

Dubai: As India’s economic expansion accelerates across key sectors, UAE-based non-resident Indians (NRIs) are finding more accessible and diversified ways to channel their capital back home. The combination of relaxed regulations, strong sectoral growth, and digital entry points has created new opportunities for overseas investors looking to build long-term wealth.

“The most scalable entry points for UAE-based NRIs in India today are renewables, fintech, e-commerce, and healthcare," said Sunny Mohnani, Business Development Director at Traze. "Each of these sectors has low barriers to entry through LRS and NRE channels, full FDI access under the automatic route, and seamless digital onboarding.”

Renewable energy leads the charge

The renewable energy segment remains one of the most compelling long-term plays. Investments in green bonds and listed equities such as Adani Green are gaining traction, supported by government subsidies and a compound annual growth rate of 8.7%, projected to reach $46.7 billion by 2032. As India targets ambitious clean energy goals, NRIs have multiple instruments to tap into this growth wave through regulated channels.

Fintech and e-commerce drive digital exposure

Fintech remains one of India’s fastest-growing industries, valued at $145 billion with an 87% adoption rate. “Fintech mutual funds and listed entities such as Paytm offer NRI investors exposure to one of the world’s most dynamic digital finance ecosystems,” Mohnani said.

E-commerce and consumer goods are also seeing steady growth, with FMCG expanding at 11% annually. Exchange-traded funds linked to leading players like Flipkart give investors diversified exposure to India’s expanding consumption story.

Healthcare and pharmaceuticals show steady resilience

Healthcare and pharmaceuticals continue to attract long-term investors due to strong fundamentals and global demand. Companies such as Sun Pharma represent stable entry points, with the sector expected to reach $88.86 billion by 2032, growing at a 5.92% CAGR.

Regulatory reforms and tax advantages

Recent reforms have made India more attractive for foreign portfolio and direct investment. Mohnani noted that “The impact of regulatory and tax changes has been largely positive, with eased SEBI and FPI timelines, higher investment caps, and targeted incentives such as production-linked schemes.”

Real estate remains a significant asset class for NRIs, buoyed by GST and stamp duty reductions, ECB loan access, and a projected $1 trillion market size by 2030. “NRIs account for nearly 15 to 25% of real estate transactions, making it a preferred long-term store of value,” he said.

In fintech, the relaxation of debt limits and greater UPI interoperability are expected to push transaction volumes toward $2.1 trillion.

Manufacturing, defence, and infrastructure are also benefiting from higher FDI limits, including up to 74% in defence, and streamlined external borrowing rules.

Double taxation treaties further reduce the tax burden for NRIs, with real estate emerging as one of the biggest beneficiaries.

Undercapitalised growth gaps

Beyond established industries, new high-growth sectors are beginning to attract NRI capital. “Semiconductors, global capability centres, and defence manufacturing remain undercapitalised but highly promising,” Mohnani explained.

India’s semiconductor industry, for example, could jump from $38 billion to $109 billion by 2030, backed by 100% FDI approval and 50% government subsidies. Similarly, global capability centres, spanning AI, analytics, and R&D, are expected to reach $110 billion by 2030.

Aerospace and defence are also gaining traction, with exports nearing $500 million and strong policy support through PLI schemes. “These are sectors where incentives, talent, and global realignments are combining to offer 20% or more equity upside,” Mohnani added.

Managing risks and balancing returns

Despite the optimism, investors face several challenges, including currency fluctuations, policy shifts, and cyclical slowdowns. The rupee, for instance, slipped 1.4% in May 2025, underscoring the importance of hedging through FCNR deposits.

“Political volatility, global tariff disruptions, and delays in subsidy disbursements can affect short-term performance. Diversification and close monitoring of indicators remain key,” Mohnani advised.

He suggests a 60-40 split between growth and stability assets through NRE and NRO channels. “SMEs and venture capital funds under AIFs offer 15 to 25% IRR but with lower control, while PMS or direct FDI can balance return and involvement,” he said.

For real estate, Mohnani pointed to a mix of REITs with 7-9% yields for passive investors and direct ownership through power of attorney for those seeking 8-12% returns. “The ideal approach is to start with mutual funds, then scale into AIFs for diversification and higher yield, keeping allocations between 10 and 15%,” he said.

With policy reforms improving transparency and access, and India’s growth story showing resilience, UAE-based NRIs are uniquely positioned to benefit. The key, analysts say, lies in choosing scalable sectors, balancing liquidity and control, and staying invested for the long run.