Dollar Above ₹90: A Golden Opportunity for NRIs in Indian Real Estate by 2026
The USD-INR exchange rate hovering above ₹90 presents a compelling window of opportunity for NRIs to invest in Indian real estate in 2026. At the current price of ₹90.58 per dollar (as of December 12, 2025), NRIs are given much more buying power, enabling them to reach luxury Indian estates like never before.
Key Benefits for NRIs at Current Exchange Rate
Amplified Purchasing Power: At an exchange rate of ₹90, an NRI with $1 million in savings can access ₹9 crore in Indian property investments, compared to approximately ₹8.35 crore when the rate was at ₹83.50. This currency advantage allows NRIs to purchase premium properties or multiple assets in high-growth locations without a proportional increase in their investment.
Lower Effective Property Costs: Luxury houses in India are still quite a bit cheaper than similar houses in the world’s major cities, and the strong dollar further adds to their affordability. For example, the luxurious parts of Mumbai have an average price of ₹33,762 per sq ft, while the premium regions of Bengaluru have a price of ₹8,870 per sq ft, which is a 15% increase as compared to the previous year in 2025. For Non-Resident Indians (NRIs) who make their income in USD, GBP, or AED, these prices are very attractive when looking at the corresponding markets in their respective countries.
Favorable EMI Dynamics for Home Loans: NRIs who obtain home loans in India are able to enjoy the benefits of the exchange rate being stable. If the currency they are using appreciates against the rupee, then practically the amount they have borrowed in that foreign currency gets reduced; hence, the EMI payment becomes easier to manage. Moreover, NRIs are entitled to tax deductions on home loan interest payments under the Income Tax Act Sections 80C and 24(b) just like Indian residents do. This double benefit of a favorable currency situation plus tax deductions improves the overall investment economics.
Top 4 Cities Attracting Maximum NRI Investment in 2025
City | NRI Allocation | Key Drivers | Property Price Growth (YoY) | Rental Yield | Best Micro-Markets --- | --- | --- | --- | --- | --- Bengaluru | 24% | IT hub, startup ecosystem, cosmopolitan lifestyle | 15% | 3.5-7% | Whitfield, Sarjapur Road, Indirangar Pune | 19% | IT, education sector, infrastructure growth | 15% | 3-5% | Hinjewadi, Baner, Kharadi Hyderabad | 12% | Tech-pharma boom | 13%-12% | 4-5.5% | HITEC City, Gachibowli Mumbai | 14% | Financial capital, premium micro-markets | 8%-10% | 2.5-4% | Bandra, Worli, Powai, Lower Parel
Challenges NRIs Face When Investing in Indian Real Estate
1. Regulatory and Compliance Complexity: Non-Resident Indians are subject to very strict rules of the Foreign Exchange Management Act that require stringent compliance. They are not allowed to buy any agricultural land, farmhouses, and plantation properties; these restrictions greatly lower investment flexibility. Money transfers can only go through NRE, NRO, or FCNR bank accounts, and if the rules are not followed, the penalties can be up to three times the value of the transaction plus freezing of assets. Non-residents also have to face TDS obligations, which are a further burden on them: 1% TDS for purchases above ₹50 lakh, 30% TDS on rental income, and 12.5% TDS on capital gains for NRI sellers. The requirement to file TDS returns in Forms 26QB or 27Q adds layers of documentation.
2. Currency Fluctuation Risk and Long-Term Exposure: Real estate is a relatively illiquid asset and is considered a long-term investment; hence, the capital of NRIs will be subject to currency risk during the 10-20+ year holding period. When the property is sold, the exit proceeds will be determined by the current exchange rate and not the rate at which the property was bought. Studies have indicated that a small currency change of only 5-10% can mean $30,000-$50,000 differences in the returns for a property of ₹1.5 crore. The longer the holding period, the greater the risk of it compounding.
3. Property Management from Overseas: Conducting extensive research on builders and checking legal documents is much more difficult for NRIs. The non-availability of a person on the ground makes it very hard to check the condition of the property, handle emergencies, or supervise renovations effectively.
4. Transaction and Repatriation Delay: Bureaucratic processes can put the transaction on administrative hold, leading to retained funds that could otherwise be used by NRIs. The requirement for getting legal approvals, RERA permissions, and registering with the sub-registrar makes the approval process long and tedious, sometimes prolonging the transaction timeline by 6-12 months.
Conclusion
The combination of great currency rates, infrastructure projects, and rising property values offers a strong argument for NRI investment in 2026. It is believed that by 2026, NRIs will be responsible for 20% of the total real estate investment in India, a significant increase from the present rate. This will make them even more important as the main drivers of the market.
