US President Donald Trump recently criticized India’s high tariffs, warning of a potential US retaliation. In a sharp statement, Trump asserted that the existing trade system is unfair to the US, and vowed to introduce reciprocal tariffs to counteract what he perceives as protectionist policies by other nations, including India. While much of the discussion has focused on trade and manufacturing, the impact of these policies on Non-Resident Indian (NRI) investment in Indian real estate is an emerging concern.
Trump’s comments have sparked speculation about how his proposed tariffs could influence currency markets, investment sentiment, and the cost of real estate development in India. Historically, such trade tensions have led to fluctuations in the rupee’s value. If the US moves forward with retaliatory tariffs, the rupee could face further depreciation against the dollar. A weaker rupee would make Indian real estate more affordable for NRIs earning in dollars, potentially boosting property investments. However, prolonged depreciation could create challenges for repatriating profits, leading to increased scrutiny by financial regulators and dampening long-term investor confidence.
Avneesh Sood, Director, Eros Group, says, “Currency fluctuations are a double-edged sword for NRIs looking at Indian real estate. While a weaker rupee initially makes property purchases attractive, sustained volatility can complicate profit repatriation and create an uncertain investment climate.”
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Beyond currency concerns, the real estate sector could also be impacted by rising construction costs. Trump’s proposed tariffs could trigger countermeasures from India, potentially increasing the cost of raw materials such as steel, aluminum, and imported electrical components. If these tariffs escalate into a broader trade dispute, real estate developers may face higher input costs, leading to delays in under-construction projects and increased property prices. This could particularly affect the luxury and high-end segments, where imported fittings and technology play a crucial role. NRIs investing in pre-launch or under-construction properties could find themselves dealing with extended timelines and unexpected cost escalations.
Trump’s broader protectionist stance could also make it harder for NRIs to invest in the US real estate, leading them to reassess their global investment strategies. “If his administration introduces additional barriers for foreign buyers—such as increased taxation, stricter lending norms, or compliance costs—NRIs who previously preferred US properties might shift their focus back to India, where real estate policies have become more investor-friendly. The easing of regulations such as the Real Estate (Regulation and Development) Act (RERA) and improved transparency in the market have already encouraged NRIs to reconsider India as a viable investment destination,” says Sood.
Immigration policies under Trump also play a crucial role in shaping NRI investment decisions. His past administration imposed stricter visa regulations, particularly targeting H-1B holders, which led to increased uncertainty among Indian professionals in the US. If similar policies return, NRIs may accelerate their investments in India as a safeguard against an unpredictable future in the US. For many, Indian real estate could become a more stable long-term financial asset compared to an increasingly restrictive American property market.
Despite these challenges, India’s real estate sector offers strong fundamentals that continue to attract NRI investors. The commercial real estate market, particularly in cities such as Bengaluru, Hyderabad, and Pune, has been a major beneficiary of multinational corporate expansions. However, if reciprocal tariffs result in economic uncertainty, some American companies may slow down their India expansion plans, affecting the demand for office spaces and putting downward pressure on rental growth. Conversely, the warehousing and industrial real estate segments might benefit if companies shift supply chains to India to counterbalance disruptions caused by tariffs on China.
“The Indian real estate market has consistently evolved to accommodate global investment trends,” Sood says, adding, “Despite trade tensions, NRIs continue to see India as a high-growth market with strong returns, particularly in commercial real estate and emerging asset classes like REITs.”
As India and the US navigate this evolving trade landscape, the Indian government may introduce policy incentives to maintain NRI investor confidence. Potential measures such as tax benefits on long-term real estate holdings, relaxed repatriation norms, and favorable mortgage options could counteract the effects of trade-related disruptions. Additionally, if US investments in Indian commercial real estate slow down due to tariff concerns, regulators might expand REIT participation for NRIs, ensuring steady capital inflows.
Trump’s proposed tariffs mark a critical juncture in US-India trade relations, with far-reaching implications beyond trade. For NRIs, the decision to invest in Indian real estate will depend on multiple factors, including currency stability, construction costs, policy incentives, and shifts in US foreign investment regulations. While protectionist policies introduce uncertainty, they also create new opportunities for NRIs seeking long-term stability and growth in India’s evolving real estate market.
Shobhit Agarwal, MD & CEO, ANAROCK Capital, says, “Should Trump’s tariffs be carried out, NRIs investing in Indian real estate could face the downside of higher costs of imported building supplies, and this could impact property values. Also, the tariffs could tax the Indian economy in general, influencing the stability of the real estate market. However, NRIs would gain from a stronger dollar, which would make investing in India more cost-effective. We don’t know much either way currently. NRIs should definitely stay current on the tariffs and evolving trade policies, and take their calls once clarity emerges – which is far from the case right now.”
Whatever be the case, the key question remains: Will Trump’s stance on reciprocal tariffs push NRIs closer to Indian real estate, or will it introduce new barriers that slow down their investment momentum?