A few weeks ago, I was thinking about this exact thing (except swap Euros for Canadian Dollars). The good news is that there are options.
Option 1: yes, buy Indian fixed deposits
Interest rates are high right now- you can get up to 9% p.a. It boils down to your sentiment about the Indian rupee going forward.
For instance, let's say you purchase a deposit for amount
x at 9% p.a., you can have it double to almost
2x in 10 years.
Three things can happen in 10 years:
- Rupee is stronger to the Euro: you have more than doubled your investment with no risk
- Rupee is the same versus the Euro: you have doubled your investment
- Rupee is weaker: depending on how much weaker it is, you may make a negative return
Are you optimistic about Indian governance and economy going forward? If you are, go for it! I certainly am.
Option 2: heard of FCNR?
Look in to FCNR deposits. I don't know about Europe, but in Canada, the best rate for a 1 year deposit is approximately 1.5%.
However, through Foreign Currency Non-Resident (FCNR) deposits, you can get up to 4% or 5%. The other benefit is that you don't have to convert currency to INR which results in conversion savings.
However, only major currencies can be used to open such accounts.