In a recent development, the increasing number of Indians giving up their citizenship and seeking citizenship abroad has raised eyebrows and prompted discussions about the underlying causes. A report by Henley Private Wealth Migration (HPWM), which tracks global wealth and investment migration trends, has projected that India may witness an outflow of at least 6,500 high-net-worth individuals (HNWIs) in 2023 alone. These findings have sparked concerns and led to scrutiny of the government’s policies and the state of the nation.
Jairam Ramesh, a prominent leader of the Indian National Congress, criticized the government over the rising trend of renunciations and expressed intrigue over the surge. He referred to government data presented in the Rajya Sabha (the upper house of the Indian Parliament), which revealed a significant increase in the number of Indians renouncing their citizenship. In 2012, 121,000 Indians gave up their Indian citizenship, while the number more than doubled to 226,000 in 2022.
Ramesh took to Twitter to voice his concerns, stating that the increase in renunciations was not limited to millionaires but extended to a broader demographic. These statistics indicate a growing trend that needs to be examined closely and addressed by the government.
The HPWM report highlighted several reasons behind the growing inclination of wealthy Indian families to seek citizenship abroad. Among the factors cited were India’s complex tax legislation, convoluted rules governing outbound remittances, and concerns of misinterpretation and abuse. It further revealed that Dubai and Singapore were the preferred destinations for these families due to their attractive government-administered “Golden Visa” programs, favorable tax environments, robust business ecosystems, and safe and peaceful environments.
The report also indicated that India ranked second globally in terms of outflow of HNWIs, trailing only behind China, which experienced a net loss of 13,500 individuals. The implications of such a significant outflow of high-net-worth individuals from India raise pertinent questions about the country’s economic environment, policy framework, and attractiveness as a place for investment and wealth creation.
The Congress party has voiced its concerns over this trend and called upon Prime Minister Narendra Modi to address the underlying issues. The party highlighted factors such as persistently high unemployment rates, limited growth opportunities resulting from demonetization and the flawed implementation of the Goods and Services Tax (GST), poor rankings in global indices on hunger, gender gap, and press freedom, as well as the prevalence of poverty in the country.
While the HPWM report suggests that India’s capacity to generate new millionaires may mitigate the concerns associated with the outflow of HNWIs, it remains a subject of debate whether this alone can offset the loss of human capital and potential economic contributions.
The increase in the number of Indians renouncing citizenship and seeking greener pastures abroad has emerged as a matter of significant concern. It highlights the need for the government to address underlying issues related to tax regulations, remittance policies, and the overall economic environment. To retain talent and foster an environment conducive to growth, it is imperative that steps are taken to ensure that India remains an attractive destination for both domestic and international investment, thereby enhancing opportunities and addressing the concerns expressed by citizens.
As the matter unfolds, further discussions and policy deliberations are expected to shed light on the reasons behind this trend and determine appropriate measures to reverse or mitigate the outflow of individuals seeking citizenship elsewhere.
Sources By Agencies
