In contrast, early investments in Indian SMEs and micro-cap companies have delivered strong returns as market participation deepens, making India an increasingly compelling choice for Gulf NRIs
Non-resident Indians (NRIs) based in the Gulf, especially in Dubai and Abu Dhabi, are increasingly turning their attention to India’s fast-growing alternative investment fund (AIF) space. After years of favouring property investments in the UAE, many are now reallocating capital towards India-focused funds that promise long-term growth and better diversification.
Indian fund managers expect this interest to rise sharply in 2026. Firms such as Aditya Birla Sun Life Realty Credit Fund, ASK Curated Luxury Assets Fund, Nisus Finance, Finbridge Ventures and Meenakshi Real Assets Fund together plan to raise more than ₹10,000 crore next year. Nearly 40 per cent of this amount is likely to come from Gulf-based NRIs through AIF structures.
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Fund managers say the shift is driven by changing return expectations and clear tax advantages
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While Dubai continues to offer a strong lifestyle, safety and global connectivity, India is being seen as the real growth story
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According to Amit Goenka, Managing Director of Nisus Finance, the UAE market is relatively limited, with real estate absorbing most investments. India, on the other hand, offers scale and variety
Investors can spread their money across commercial real estate, warehouses, data centres, co-working spaces, listed shares, structured credit, commodities and alternative funds. This wider choice allows better risk management across economic cycles, something smaller economies cannot easily offer.
Industry executives note that wealthy professionals and business families from the UAE are also showing growing interest in Indian SME initial public offerings, micro-cap stocks and specialised AIF strategies. Many already own property in Dubai and now see India as the next destination for capital growth.
While Dubai’s property market remains attractive, returns have largely stabilised. Rental yields average 7–8 per cent in the mid-range segment, with luxury homes often delivering modest overall gains.
