The Great Indian Migration: Why Are the Rich Leaving the Country?

Global Wealth Migration Review data showed that around 7,000 Indian millionaires moved abroad permanently in 2020.

A total of 8,81,254 Indians have given up their citizenship since 2015, the Ministry of Home Affairs informed the Lok Sabha in December 2021.

(Photo: Namita Chauhan)

(This story was originally published on 24 May 2022. It is being republished in light of the central government's statement that over 1.6 lakh Indians gave up their citizenship in 2021.)

"I remember applying for a Permanent Residency when I was pursuing my MBA. My reasoning at the time was that I wanted a better lifestyle. I followed that plan and did a few jobs here in India. However, I didn't get any satisfaction or happiness working with some of the start-ups here. My professional experiences with people, travelling challenges and the pollution in Delhi were major factors for me to move," 34-year-old Sumit Kumar (name changed on request), who moved to Canada with his wife in February 2019, told The Quint.

Much earlier than Sumit, 46-year-old Aneesh Sinha (name changed on request) moved to Canada with his wife in 2003.

"I was 27, and my career hadn't taken off in India yet. So I asked myself, what do I have to lose? The West also enamoured me. I was also influenced by this cousin who eventually never got to go," he told The Quint.

His story has a twist, though. He returned to India with his wife and two kids in 2007 after spending close to five years in Canada and obtaining Canadian citizenship.

He got a high-paying job, and a top post in India in the banking Industry, but something was missing.

"The stress that accompanied all those perks, I didn't want that. I wanted to get off that rat race. My kids were also growing up. We decided that we wanted our kids to be educated in Canada. We gave ourselves five years to check if this India gig worked for us. But it did not. Career-wise my life was good, but my family life wasn't great."

Aneesh returned to Canada with his family in 2011.

Sumit's and Aneesh's are just two cases from the long list of 8,81,254 Indians who have given up their citizenship since 2015, for different reasons, as per Ministry of Home Affairs (MHA) data presented in the Lok Sabha in December 2021.

This means that 345 people have been leaving the country daily for the last seven years.

Not just them. This upward migratory trend or the 'The Great Indian Migration' also includes high net worth individuals, or HNIs, who have been increasingly renouncing Indian citizenship over the years for several reasons.

We take a detailed look.

8.81 Lakh Indians Renounced Citizenship in 7 Years

In response to a question in the Lok Sabha in December 2021, Minister of State for Home Affairs Nityanand Rai revealed that 8,81,254 people had given up their Indian citizenship between 1 January 2015 and 21 September 2021.

8,81,254 people had given up their Indian citizenship between 1 January 2015 and 21 September 2021.

Rai told the parliament that according to the data available with the Ministry of External Affairs (MEA), 1,33,83,718 Indians are now living in foreign countries.

1,33,83,718 Indians are now living in foreign countries.

Aneesh and Sumit, two MBA graduates, are also among the highly skilled Indians who chose to move abroad, highlighting another growing trend.

India Has the Highest Share of Highly Educated Emigrants

According to the Organisation for Economic Co-operation and Development (OECD) report published in February 2020, India has the largest high-skilled diaspora in the OECD area, with over 3 million tertiary-educated migrants.

The OECD currently has 38 member countries, including Australia, Canada, France, Germany, Netherlands, New Zealand, the United Kingdom, United States, among others.

As per the OECD report, in 2015-16, India was also ranked second in the list of the main origin countries for immigrants living in the OECD countries, with 4.8 million migrants respectively, over one-quarter of whom arrived during the previous five years, which reflects the strong recent surge in immigration from the country.

Reasons Behind the Brain Drain

According to economist Shruti Rajagopalan, it is a “consequence of an education system designed for ‘selecting’ the best and brightest in an economy that is still too controlled and cannot create opportunities for its best and brightest.”

A report by the Centre for Monitoring Indian Economy showed that unemployment levels rise with education, with one in five college graduates being unemployed as of December 2021.

From September-December 2018, the unemployment rate among those who had completed graduation or higher education (graduate+) had reached 13.2 percent. The figure was 12.7 percent in 2017.

According to InterNations, a Munich-based global social networking site for expat communities, "Indian expats are happier with their working hours and live-in countries where new concepts of work play a more important role than back home in India. Indians enjoy better working hours and a better work-life balance abroad."

"Predictability of life, stability and a laidback lifestyle were my reasons in 2011. I worked on a lesser salary than what I was earning in India, but I was very happy. My work-life balance was such that I used to drop and pick up my kids from school. By 3.30 pm, we used to be together at home. This is the thing I was missing in India," informed Aneesh.

"To be honest, I have not rued my decision since. I love the fact that I came back when I did. However, certain things about this country are not pretty. You have a mechanical life here, but it does leave you time with your loved ones. It takes time to get to that state of mind," he added.

InterNations' Expat Insider 2021 survey also revealed that 59 percent of Indians working abroad relocated for their career. This figure was much higher than the global average of 47 percent.

Migration of India's Super Rich

Among those migrating are also India's super rich.

According to a Morgan Stanley report published in The Economic Times in 2018, India lost the highest percentage of dollar-millionaires to migration between 2014 and 2018 (a millionaire is defined as someone with wealth of $1 million or more).

Data compiled by the team headed by Ruchir Sharma, head of emerging markets and chief global strategist at Morgan Stanley Investment Management, showed that nearly 23,000 dollar-millionaires left the country between 2014 and 2018, with 7,000 leaving in 2017 alone. The 23,000 figure amounts to 2.1% of India's rich, ahead of France's 1.3% and China's 1.1%.

"One likely reason that Indian millionaires are leaving is due to the anti-corruption and regulatory crackdown in India, resulting in wealthy Indians wanting to move their capital elsewhere," Ruchir had told the Financial Express.

It is important to note here that on 8 November 2016, Prime Minister Narendra Modi announced 'demonetisation' to weed out black money from the country. The move wiped out 86% of India's currency overnight, with the currency notes of Rs 500 and Rs 1,000 denominations getting banned.

Meanwhile, data from the Global Wealth Migration Review report, published in September 2020, showed that 2% (around 7,000) of India's millionaires shifted abroad permanently in the year 2020 alone. This is despite the COVID-19 pandemic, which started spreading in India March 2020 onwards.

China topped the list with 16,000 HNIs migrating, followed by India and Russia.

The report, however, said that there was an overall decline in the HNI migration numbers due to the coronavirus impact, adding that travelling/migrating was likely to be more complicated "due to ongoing quarantines and health checks in most countries."

"Provisional estimates show a drop in inward and outward HNI migration for the year 2020 as many people have been unable or unwilling to move due to the coronavirus outbreak. Some have put off moving till a later date, whilst others have cancelled their plans to move altogether," the Global Wealth Migration Review report said.

Reasons Why HNIs Prefer To Migrate

According to the Global Wealth Migration Review, wealth migration figures indicate the health of an economy. If a country is losing a large number of HNIs to migration, it could be because of serious problems in that country such as a high crime rate, lack of business opportunities, sanctions and embargoes, and political instability.

"It can also be sign of bad things to come as HNIs are often the first people to leave," reads the report. For example, "Russia, Iran and Qatar, all have sanctions and embargoes to deal with and they have been losing HNIs to migration of late," says the report.

Russia and Iran face sanctions from Western countries, while Qatar faces an embargo from the UAE, Egypt and Saudi Arabia.

In the case of Hong Kong, political instability has damaged the country long-term appeal.

Conversely, countries that attract HNIs tend to be healthy and have low crime rates, good schools and good business opportunities. These include Australia, the US, Switzerland, Canada, Singapore, among others.

According to the data compiled by the Global Wealth Migration Review, a few reasons why HNIs prefer moving to other countries:

• Safer for women and children

• First World economy and growing economy

• Lifestyle: Better climate, low pollution, nature, and scenery

• Superior educational opportunities for their children

• Work and better business opportunities (ease of doing business)

• Low inheritance tax in the country they are moving to (eg: Australia has no inheritance taxes, i.e., the tax levied on property and money acquired by gift or inheritance, making it easier for wealthy people to stay in the country and build their businesses for future generations)

• Robust healthcare system

• Better standard of living

• Oppressive government in home country

Aneesh shared the story of his very close friend, who invested a large sum of money (Rs 90 lakh) to obtain Canadian citizenship in 2013 through a separate citizenship programme (As of 2022, an investment of CAD 1.2 million or Rs 7.27 crore is needed for a period of five years at no interest under one of the two available immigrant investor programmes).

"The catalyst for her was she and her husband just wanted a good life," said Aneesh.

The 'Golden Visa' Route for Wealthy Indians

The 'Golden Visa' route is also a popular option among wealthy Indians. It means acquiring the residency, immigration, and citizenship of a country through investment. It opens several opportunities for families in terms of business, career, education, healthcare, tax, and lifestyle.

According to Henley and Partners, an investment firm working for residence and citizenship in the UK, the number of Indians inquiring about the Golden Visa route increased by 54 percent in 2021 from 2020. There was also a 63 percent increase in interest in investment migration shown by Indian nationals between December 2019 and December 2020.

"Until a few years ago, the investment migration industry in India was predominantly centred around Australia, Canada, the UAE, the UK, and the US, but there is now a growing interest in residence-by-investment programmes in Europe. A significant driver of this trend is those investors seeking alternative residence or citizenship as a means of hedging sovereign risk," said Juerg Steffen, chief executive officer, Henley & Partners. A hedge is an investment that protects your finances from a risky situation. It is similar to home insurance.

Portugal, Australia, the US, Malta, and Greece are some of the top countries Indians want to move to, as per Henley and Partners. The golden visa programmes offered by countries like Portugal, Greece, and Italy allows successful applicants to apply for citizenship after a few years of residence.

“While India remains an exceptionally exciting place for business activities, commercial growth for corporations, and high-yielding investments, high-net-worth families are becoming increasingly cosmopolitan and transnational and are keen to diversify a portion of their wealth abroad. Families are seeing the benefits of investment migration not only as a means to improve their mobility, or for lifestyle and education purposes, but also as an avenue to access global markets, to protect their families’ futures, and to have an insurance policy in place to diversify their domiciles as a hedge in this volatile world in which we live," Nirbhay Handa, Group Head of Business Development at Henley & Partners, told The Times of India.

(With Inputs from The Times of India, Economic Times, and the Financial Express.)