India’s diaspora, traditionally viewed as its ‘soft power’ due to its cultural influence and success abroad, is increasingly contributing to India’s ‘hard power’ through financial strength.
The Indian government, led by Prime Minister Narendra Modi, has long recognized the importance of the Indian diaspora, with Modi calling it the ‘American-Indian spirit’ during his visit to the US.
In recent years, the shift in migration patterns toward skilled Indian workers in advanced economies has intensified the economic contributions from NRIs.
The Shift In Remittance Sources
A recent Reserve Bank of India (RBI) report highlights the changing landscape of remittances, with a significant rise in remittances from advanced economies (AEs) like the US, UK, Singapore, and Australia.
In 2023-24, these countries accounted for over half of India’s remittances, surpassing the Gulf Cooperation Council (GCC) countries.
The US alone contributed 27.7% of the total remittances, showing the growing financial clout of skilled Indian workers.
Despite fewer numbers compared to the UAE, which traditionally dominated remittance inflows from blue-collar workers, Indian migrants in the US contribute more due to their higher-income white-collar jobs.
The Success Story Of Indian-Americans
The success of Indian-Americans, particularly in high-earning sectors like technology and healthcare, further bolsters this trend.
A BCG and Indiaspora report reveals that the Indian diaspora in the US, which includes 51 lakh individuals, has a median income of $136,000-almost double the US average.
Indian-Americans are dominant in many industries, with one in 10 US physicians being of Indian origin, and Indian-Americans owning a significant portion of hotels, convenience stores, and tech companies.
Their financial contributions, especially in high-revenue sectors, reflect their increasing importance in the global economy.
Investing Back Home
As India’s economy grows rapidly, fueled by structural reforms and demographic advantages, NRIs are increasingly channeling their wealth back to India.
Factors such as India’s rising economic status, impressive stock market returns, and a growing start-up ecosystem are driving these investments.
Additionally, the depreciation of the Indian Rupee offers NRIs favorable exchange rates, further incentivizing them to invest in assets like real estate and equities.
Many NRIs are also attracted by the country’s improved infrastructure and growing job opportunities, prompting a reverse brain drain as skilled professionals return to capitalize on emerging opportunities.
The rise of white-collar NRIs is reshaping India’s global influence, shifting from a reliance on soft power to a more robust financial presence.
As these skilled professionals contribute to both remittances and investments, they help solidify India’s position as a rising economic power on the world stage.
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