Opinion
Why are so many rich Indians packing up to leave India?
Summary
- A larger fraction of India’s millionaires are reported to be moving abroad than China’s. The reasons for emigration among the country’s well-off may vary, but we must identify the factors driving this trend so that we can take remedial measures.
India is experiencing a flight of the wealthy, and that is not a great feeling. As the fastest growing large economy in the world, with its ease of doing business improving—strike-prone Kerala recently won the Centre’s prize for the best-in-class business reforms—India should be not just retaining its rich and talented, but also luring to its shores entrepreneurs from around the world.
Something is amiss. Indians have been snapping up spots in the sun abroad. Between July and August this year, there was a 37% increase in Indian purchases of real estate in Greece, including properties under construction. These investments can serve as an escape route out of India.
Greece has had a ‘golden visa’ programme with a relatively low bar: invest €250,000 in Greek property and you’d be eligible for permanent residency. That is not a big sum for India’s better off. Many flats in Mumbai, Gurgaon and other big cities cost more than the ₹2.2 crore or so that sum works out to.
Also read: Golden visas beckon well-heeled Indians
But Greece recently raised the investment eligibility for its residency permit to €800,000, with effect from 1 September. Hence the spurt in Greek property purchases.
Many believe that the country’s wealthy migrate when they are forced to flee. Like, for example, when banks start insolvency proceedings against them and their companies.
True, rich Indians have given the Sanskrit term Vasudhaiva Kutumbakam, ‘the world is one family,’ a new meaning when faced with action for the recovery of unpaid dues.
But the flight of delinquent capitalists isn’t all there is to the apparent desire of well-heeled Indians to resettle abroad. In its 2024 edition, the Henley Private Wealth Migration Report says that 4,300 dollar millionaires are projected to leave India and take up residency abroad this year.
The report takes into account only migrants who spend more than six months of the year in their newly adopted land and excludes millionaires who, gripped by wanderlust, embrace the idea as a means to gain easy access to countries that don’t roll out red carpets for Indian passport-holders.
Also read: What are “golden visas"?
The report also notes that India’s exit number is lower than the 2023 report’s figure (by all of 800), and that the world’s largest emigration of dollar millionaires is from China.
But then, since China has 6.2 million dollar millionaires while India’s count is less than a sixth of that number, out-bound Chinese are fewer as a share of the total in this bracket of wealth than Indians packing up. On the face of it, the Chinese have stronger reasons to leave their country than Indians do.
Beijing tells Chinese industry what kind of tech sectors should grow, capital flows to some sectors at a lower cost than to others, and the state can arbitrarily put people behind bars.
China’s Xinjiang policy of forced camps to “educate" people has tainted swathes of its industry using direct or indirect inputs from that region.
And China is prone to sanctions by the US and other countries in the West. Business owners in India cannot claim to face such problems.
Why then are so many of India’s rich leaving our shores? Is it to escape a tax burden that they expect will only get heavier? Fear of policy caprice? Are they put off by India’s level of protection for some sectors?
Also read: Behind the allure of investment visas
Do they see potential economic pitfalls in the country’s political patterns? Or is it a broad exhaustion with the “way things are"? The problem must be identified and fixed. India cannot afford to lose its most dynamic sons and daughters.
