Buying property in India for US Citizen grandchild

[xfpgas]

Grandparents in India (Indian citizens) want to buy land for investment purposes for US citizen grandchild ( 1 year old baby ). It is not much, but they figured it will give the best returns in 15-20 year time span , rather than a FD.

You can assume the US Citizen grandchild will grow up and live in US all her life as will the parents of the grandchild (both US Citizens).

We have 2 options -

1) Buy the property in grandparents name and gift it to the grandchild when he turns 18, hoping the sale of the property could help with college costs.
2) Buy the property in grandchild's name now.

Which option is better?. I am concerned about the taxes US citizen grandchild has to pay now or later. Also, are there any concerns with repatriating the money from sale of the property to US when needed.

Thank you for your help.

[anuj106]

You can even consider setting up a trust in India which shall hold the property till the child turns 18.

Anuj

[SetToGo]

Also make sure the land is non-agricultural.