Every year, Henley & Partners, an international investment migration advisory firm, releases its Henley Private Wealth Migration Report. The report tells how many millionaires (those having a liquid investable income of USD 1 million dollars or higher) leave or enter a country in a given year. The report highlights India’s drain of millionaires – with 5,100 leaving the country in 2023 and 4,300 more projected to do so this year.
Why Are So Many Millionaires Leaving India?
While the number for both 2023 and 2024 (projected) is staggeringly large, it is worth noting that it is lower than 2022’s figure of 7,500.
Going by ranks, India ranks third worldwide in the number of millionaires departing the country. On number 1, we have China, followed by the UK. In China, 15,200 millionaires migrated out of the country, while in the UK, the number stood at 4,200.
The primary reason behind this trend is the search for a better, more sophisticated lifestyle and convenient access to basic services.
Indian cities, even the metropolitans, are grappling with third-world problems such as lack of water, record-breaking pollution, soaring mercury levels, road potholes, overcrowded public places, and outdated education and healthcare systems.
The residents of the capital city of Delhi have been protesting for water – a basic necessity that should be made available without any excuses. The intense heatwave in North India and the hot and humid weather of the coastal cities are causing extreme discomfort, which becomes unbearable without the luxury of an air conditioner.
Money here can buy you a Mercedes or even a Porsche, but the condition of roads can suck out all the joy from driving these luxury cars. Having to stay stuck in traffic for hours at end and crossing water-filled roads during monsoons would naturally entice a person with resources to look for a better way of life.
In such scenarios, it seems pretty valid why a country’s rich and elite are leaving in search and hope of a less stressful life.
Not Just Millionaires Who Leave
India has the highest number of migrants globally, with 2.5 million people leaving the country every year. The top countries of choice to settle are the USA, Canada, the UK, France, Germany, Australia, and Singapore.
A major segment among this is students who leave the country in pursuit of higher education. Many of them eventually choose to settle abroad due to better pay, work-life balance, and access to services.
Wake Up Call For The Government
The central BJP government, now continuing office for its third term, has been adamant about its vision of making India a USD 5 trillion economy by 2025 (next year). This is quite ironic given how PM Gareeb Kalyan Anna Yojana has been extended by the Prime Minister by five years more.
It does raise questions about whom this title of USD 5 trillion economy benefits if 80 crore people (more than half of the population) still have to rely on government social welfare programs to not sleep hungry.
Regardless, for the country to be able to achieve this ambitious goal, a primary requirement is for the wealthy to stay and build in the country itself. When individuals with resources invest and spend their resources in the country, it creates unprecedented opportunities.
However, if those people start leaving their country because the basic lifestyle requirements are not met in a nation poised to become a superpower and appear on the global stage, it calls for a due analysis and recourse strategy.
The Henley & Partners report highlights how many of India’s millionaires invest their resources in their home country even if they themselves house abroad. While it is slightly positive, we should not ignore the monetary losses to the country arising from the loss of consumerism that these emigrants could have generated.
Not A Matter of Grave Concern
Despite such large numbers of high-net-worth individuals leaving the country, it is not a matter of immediate concern as India has 3,26,400 millionaires as of February 2024. Even though it is just 1% of the total number of millionaires globally, the growth numbers are impressive.
India is expected to have 16.32 people with an income of USD 1 million or more by 2026. The situation here is the complete opposite of what is happening in the UK, which has been losing the number of millionaires over the last decade. Despite the outflow, India has been growing its millionaire base impressively.
Top Millionaire Losing Countries
China leads the list consecutively after the last year. In 2022, it ranked second because the Russia-Ukraine war led to mass emigration from Russia, leading it to the first rank.
Growing political turmoil in China, coupled with the economic slowdown, is leading to this problem. The recent ban on Huawei 5G by a few of the world’s biggest markets, such as the USA, Australia, and the UK, is just one example of how the country’s tech industry is bleeding.
As the world’s economic superpowers are looking to divest from China to diversify their risk and reduce their dependency, the country’s richest are leaving to secure their future.
Second on the list is the UK, which was once a magnet for the world’s most affluent class. Brexit has impacted the financial status of the UK, historically the most advanced and richest nation in the world (during the 19th century).
Unwelcome tax regimes have been reported as major contributors to this outflow of millionaires from the country.
South Korea is expected to be ranked number 4 this year, with 1,200 millionaires leaving the country, a major reason for which is the nation’s security stance with America as Trump might become the president again in 2024.
Ranking number 5 is Russia, expected to lose 1,000 millionaires this year to avoid economic sanctions put as a result of the war.
Brazil, South Africa, Taiwan, Vietnam, and Nigeria are in the top 10 list, all majorly in search of better lifestyles, much like India.
Countries Attracting The Most Millionaires
UAE is the leading destination for millionaires looking to settle. Zero taxes, lush lifestyle, citizen-friendly rules, golden visa, and its status as one of the economic leaders make it a safe bet for the affluent to settle. 6,700 people are expected to immigrate there. The country has a safe and sturdy ecosystem to safeguard and nurture the wealth.
The USA is the next in line, with 3,800 people expected to migrate there. With 3,500 expected immigrants, Singapore ranks third for the second consecutive time, followed by Canada (3,200 inflows) and Australia (2,500 inflows). Four European countries, including Italy, Switzerland, Greece, and Portugal, and Japan, are in the top 10 list. These countries are all highly developed, having an ecosystem that nurtures economic growth and entrepreneurial spirit.
The benefits to a country arising from global millionaires inflow are multi-faceted. Not only does it lead to healthy foreign exchange earnings, these people also have a high tendency to start a new business in the country they migrate to. 20% of these millionaires are entrepreneurs with a knack for starting businesses and providing employment opportunities to the locals.
What is worth noting is that for the first time in years, Israel is not on the Top 10 Attracting list. This is a no-brainer as to why it has happened – the Israel-Palestine conflict.
Conclusion
India is establishing itself on the global map as an attractive investment destination. The country ranking in the top 3 every year in the millionaire outflow list does not make for a strong case.
It is high time that the government gets its basics right. Solving for the most on-ground problems, that can improve the overall lifestyle of individuals is crucial.
