10 REASONS INDIAN HNWIs HAVE BEEN SLOW TO EMBRACE INVESTMENT MIGRATION
by PRASHANT AJMERA, Ajmera Law Group - Global Investment Advisors
O
n the surface, India’s market for investment migration has the same fundamental conditions as China: a population of some 1.3 billion, a passport with limited mobility, a large number of HNWIs, and plenty of push factors like pollution, restrictions on individual liberty, and lack of educational opportunities. But look closer and you’ll find that India has many more obstacles – mainly cultural – that have prevented the investment migration market from flourishing to the same degree that it has in China. We’ll look at each of these limiting factors in turn but, first, some background.
A brief history of Indian emigration Migration from India to other countries around the world started in earnest more than 100 years ago. Back then, the migrants were mostly labourers recruited to work on sugar plantations in the Caribbean islands and Mauritius, railroads in Canada, and as industrial and domestic workers in South Africa, Malaysia, and Indonesia. During this period, only people with meagre means thought of migrating abroad in order to sustain their families. After India’s independence from British rule in 1947, however, this labour migration decreased dramatically. The post-independence period saw Indians leaving the country for a very different reason; that of obtaining higher education and, thereafter, settling abroad. During this period, foreign migration became a symbol of social status, and obtaining a foreign education and living abroad become aspirations that most Indians nurtured, but which very few of them could afford. The most favoured destinations were the USA and the UK. Qualified Indians
16 Citizenship By Investment
pursued higher studies in these countries and then settled into lucrative jobs. Doctors, engineers, and architects from India settled in these countries during this time. In the mid-seventies, the Gulf countries – notably the UAE, Oman, and Kuwait – were growing exponentially thanks to petrodollars. Need for advanced infrastructure development, high-tech facilities and world-class standards of living generated demand for a huge labour force; qualified professionals as well as labourers. This unprecedented growth prompted a second wave of workforce migration from India to the Middle Eastern countries. Presently the Indian diaspora is the most populous expat community in the Middle East. This era was fraught with recruitment scams and fraudsters cheating ignorant workers with false promises of a highly-paid job and a better life in exchange for huge amounts of money. Because of this, in the year 1983, the Indian government passed the Emigration Act to regulate agents recruiting manpower from India mainly to Middle Eastern countries.
In 1993, Canada introduced skilled migration. It was a highly streamlined process, paving the way for systematic skilled worker migration from India to Canada. Eventually, Australia, New Zealand, and some European countries also joined the fray. During the late ‘80s and all throughout the ‘90s, the growing IT industries and start-ups in Western countries and the Y2K problem attracted a large pool of IT professionals from India. These professionals, who received mediocre salaries in India, were highly-paid by foreign companies. Good money, cushy jobs and a high standard of living eventually prompted them to settle down with their families in these countries. This was a period of ‘brain-drain’ for India. These professionals, who received mediocre salaries in India, were highly-paid by foreign companies. Good money, cushy jobs and a high standard of living eventually prompted them to settle down with their families in these countries.