GCC Non-Resident Indians Favor Equities Over Real Estate Amid Tensions

GCC-Based Non-Resident Indians Shift Wealth Allocation Amid Geopolitical Uncertainty

In the face of persistent geopolitical uncertainty in the Gulf, a significant number of Gulf Cooperation Council (GCC)-based Non-Resident Indians (NRIs) are making a strategic shift in their wealth allocation. According to Equirus Wealth's latest survey of 8,300 GCC NRI clients, 73% of respondents have increased their exposure to Indian equities and mutual funds. This trend indicates a high level of conviction among NRIs, with 42% ready to deploy fresh capital into Indian markets.

While NRIs are not rushing into direct stock picking, the preferred route is managed products such as mutual funds, Portfolio Management Services (PMS), and GIFT City structures. Within equities, the bias is toward large-caps first, followed by mid-caps, with broad sectoral exposure rather than concentrated bets. Key areas of interest include Banking & Financials, Consumption, Pharma, and Infrastructure. These investors are looking at broad-based allocation and avoiding concentration risk at this stage.

At prevailing valuations, particularly in the mid-cap segment, these investors are pencilling in mid- to high-teens returns over a 3 to 5 year horizon. The expected payoff rests primarily on corporate earnings delivery, policy continuity, and steady domestic-plus-NRI flows, rather than further multiple re-rating. This conviction appears reasonably durable, with a 10 to 15% market correction more likely to elicit "buy on dip" behaviour than fear, while a 20% or deeper drawdown could trigger selective profit booking and portfolio recalibration.

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The survey also shows a clear negative net direction in real estate, with 40% of respondents actively reducing exposure. This is not a minor rebalancing, as NRIs are selling both Indian assets and real estate portfolios in GCC countries, driven by heightened geopolitical risk. In India, exits are most pronounced in Tier-2 and Tier-3 cities and peripheral land parcels with speculative holdings accumulated over the past decade.

Crucially, 70 to 80% of the proceeds from these real estate sales are being redeployed into Indian equities through MFs, PMS, and AIFs. The remainder is being held in fixed income and gold for portfolio balance and hedging.

Another quiet but important evolution is visible in remittance patterns. Nearly half (49%) of remittance intent is now directed toward investment in India (27%) and retirement planning (22%), overtaking traditional family support. Over the next 12-24 months, these investment-directed flows from GCC NRIs could add a few billion dollars annually into Indian equities and mutual funds, with timing influenced by oil price movements and GCC bonus cycles.

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Despite 83% of respondents acknowledging geopolitical risks, overall financial confidence holds at 3.5 out of 5, with 86% reporting stable or improved sentiment year-on-year. Behaviour has been disciplined, with 35% increasing savings and 26% cutting discretionary spending, yet 75% remain actively invested or selectively deploying capital. Country-level differences are noticeable, with Kuwait-based NRIs reporting the highest confidence (3.93), while those in Bahrain are more cautious (2.75).

What emerges is a picture of a more financially sophisticated GCC NRI base that is treating India not merely as a remittances destination but as a core wealth-creation market. The shift from physical to financial assets is structural, driven by experience with yields, liquidity, and operational ease. For Indian capital markets, this represents a relatively sticky source of foreign capital, one that is less prone to sudden exits than some FII segments (provided that corporate earnings and macroeconomic stability hold).