Tag: IndiaEconomy

4,300 Indian Millionaires to Migrate in 2024, Favoring UAE Amid Global Wealth Mobility Trends

Staff ReporterCommunity, News 0

Around 4,300 millionaires are projected to migrate from India this year, with many choosing the UAE as their new home, according to a report by Henley and Partners, a global investment migration advisory firm. Despite India’s status as the world’s fastest-growing economy, it is expected to rank third in millionaire migrations, following China and the United Kingdom. This migration trend occurs as India, now the most populous country globally, experiences a net millionaire exodus that is less than 30 percent of China’s. “While India loses thousands of millionaires each year, with many migrating to the UAE, concerns over the outflows may well be mitigated as with wealth growth of 85 percent over the past decade, the country continues to produce far more new high-net-worth individuals than it loses to emigration,” the report stated. In the previous year, 5,100 Indian millionaires migrated abroad, according to the report.

The migration of millionaires significantly impacts a country’s foreign exchange reserves since these individuals often transfer substantial assets when they relocate. The primary motivations for millionaire migration include tax benefits, safety and financial considerations, retirement prospects, business opportunities, and an enhanced lifestyle. Despite the decline from the 5,100 departures in 2023, India remains among the countries with the highest number of HNWIs leaving the country. Henley & Partners defines millionaires and HNWIs as those with liquid wealth of at least US$1 million. Meanwhile, the UAE is expected to attract an unprecedented 6,700 millionaires by the end of 2024, thanks to its world-class infrastructure, strategic location, advantageous tax regulations, and other appealing factors. To further attract talented individuals, the UAE offers a golden visa, granting permanent residency to entrepreneurs, foreign investors, and talented individuals making substantial investments. This visa program has become particularly popular among Indians.

Besides the UAE, Indians are increasingly seeking citizenship and residency through investment schemes in countries such as Portugal, Greece, Spain, Malta, and the Caribbean nations of Antigua and Barbuda, and Grenada. The reasons for these relocations vary. Some wealthy families move due to security concerns, while others seek tax advantages and better budgetary conditions. Many also migrate in search of improved retirement options, business opportunities, appealing lifestyles, healthcare systems, education for their children, and an overall higher standard of living.

This trend of millionaire migration is notable as it reflects the broader socio-economic dynamics at play within India. The country’s rapid economic growth has led to the creation of significant wealth, but it has also highlighted disparities and concerns that drive individuals to seek opportunities abroad. The report emphasizes that while the loss of millionaires could be seen as a negative indicator, India’s ability to generate new high-net-worth individuals at a faster rate suggests a resilient economic environment.

The migration of millionaires has various implications for India. On the one hand, it represents a loss of potential investment and economic activity that these individuals might have contributed domestically. On the other hand, the continuous creation of new millionaires indicates a robust economic framework capable of producing and sustaining wealth. As the world’s fastest-growing economy, India faces the dual challenge of retaining its wealthy citizens while continuing to foster an environment conducive to wealth creation.

In terms of foreign exchange reserves, the departure of millionaires can lead to a significant outflow of capital. These individuals often move substantial portions of their wealth to their new countries of residence, impacting the host nation’s financial landscape. The motivations behind these migrations are diverse, encompassing financial, personal, and lifestyle considerations. For many, the allure of lower taxes, safer environments, better retirement options, and enhanced business opportunities outweigh the benefits of staying in India.

The UAE stands out as a particularly attractive destination for migrating millionaires. Its strategic location, state-of-the-art infrastructure, and favorable tax policies make it a prime choice for those seeking a new home. The introduction of the golden visa program has further boosted its appeal, offering a streamlined path to permanent residency for investors, entrepreneurs, and talented individuals. This program’s popularity among Indians highlights the UAE’s success in positioning itself as a hub for global wealth.

In addition to the UAE, European countries like Portugal, Greece, Spain, and Malta have become popular choices for Indian millionaires. These countries offer various investment schemes that grant residency or citizenship in exchange for significant financial investments. The Caribbean nations of Antigua and Barbuda and Grenada are also emerging as attractive destinations, offering similar investment-based residency programs. The factors driving these migrations range from seeking better security and financial conditions to desiring a higher quality of life and improved healthcare and education systems for their families.

The report from Henley and Partners sheds light on the complex interplay of factors influencing millionaire migration. It underscores the importance of understanding these trends within the broader context of global economic and social shifts. While the departure of wealthy individuals presents challenges, it also highlights the dynamic nature of wealth creation and distribution in today’s world. India’s experience, as detailed in the report, illustrates the ongoing evolution of the global economic landscape and the factors driving individual decisions to seek opportunities beyond their home country.

Ultimately, the migration of Indian millionaires is a multifaceted phenomenon with implications for both India and the destination countries. It reflects broader trends in global wealth mobility and the factors influencing individuals’ decisions to relocate. As India continues to grow and evolve economically, understanding and addressing the motivations behind millionaire migration will be crucial in shaping its future trajectory on the global stage. The insights provided by Henley and Partners’ report offer valuable perspectives on these dynamics, highlighting the need for a nuanced approach to addressing the challenges and opportunities presented by this trend.

India’s Economy: A Beacon of Growth in a Turbulent World

Dr. Joseph Chalil & Badal ShahEconomy, Global 0

Amidst a choppy global landscape, India’s economic trajectory shines with the vibrancy of a beacon, defying headwinds and emerging as one of the fastest-growing major economies in FY22/23 with a remarkable 7.2% growth rate. This feat, as highlighted by the World Bank’s India Development Update (IDU), positions India as a testament to resilience, surpassing global benchmarks and offering valuable lessons for the world.

The IDU underscores India’s economic fortitude in the face of significant global challenges, citing the nation’s growth rate as the second-highest among G20 countries, nearly double the average for emerging market economies. This commendable achievement, the report suggests, stems from India’s robust domestic demand, substantial public infrastructure investment, and the strengthening of the financial sector.

“India’s economic performance is truly remarkable,” declares Kristalina Georgieva, Managing Director of the International Monetary Fund. “Showcasing its robust domestic engine amidst global uncertainties, this growth story, fueled by smart policy interventions and a vibrant private sector, offers valuable lessons for the world.”

Bank credit growth, a pivotal indicator of economic vitality, surged to 15.8% in the first quarter of FY23/24, compared with 13.3% in the corresponding period of FY22/23, indicating a robust financial landscape supporting economic expansion.

India’s economic ascent is far from over. By capitalizing on its strengths, mitigating future challenges, and adopting smart policy measures, India has the potential to become a global economic powerhouse. As Auguste Tano Kouame, World Bank’s Country Director in India, aptly states, “Tapping public spending to attract private investments will create favorable conditions for India to seize global opportunities and achieve even higher growth.

In addressing the spike in headline inflation, the report notes adverse weather conditions as a contributing factor. Headline inflation rose to 7.8% in July, primarily due to increased prices of food items like wheat and rice. Senior Economist and lead author of the report, Dhruv Sharma, anticipates a gradual decrease in inflation as government measures boost the supply of key commodities, ensuring a conducive environment for private investment.

The report also sheds light on India’s fiscal consolidation, projecting a decline in the central government fiscal deficit from 6.4% to 5.9% of GDP in FY23/24. Public debt is expected to stabilize at 83% of GDP, indicating prudent fiscal management. On the external front, the current account deficit is anticipated to narrow to 1.4% of GDP, supported by foreign investment flows and robust foreign reserves.

“India’s handling of the pandemic has been a masterclass in crisis management,” observes Hardeep Puri, Director-General of the World Trade Organization. “Its proactive approach, combined with decisive policy measures, helped mitigate economic damage and paved the way for a faster rebound.”

As the world grapples with economic uncertainties, India’s economic story serves as a testament to the nation’s resilience, foresight, and strategic economic policies. The international community recognizes India’s steadfast commitment to sustaining growth even amidst unprecedented challenges. In the words of global leaders, the remarkable growth of India’s economy stands as a beacon of hope and inspiration for nations around the world, reaffirming India’s status as a key player in the global economic landscape.

India’s Economic Growth Outlook for 2023-24: NSO Estimates 7.3% Real GDP Growth, but Concerns Linger

Staff ReporterBusiness, Economy 0

India’s economic landscape for the fiscal year 2023-24 is anticipated to witness a growth of 7.3%, surpassing the 7.2% recorded in the previous year, according to the initial advance estimates of national income released by the National Statistical Office (NSO) on Friday. This projection indicates a more optimistic outlook compared to the 7% growth recently projected by the Reserve Bank of India (RBI).

In the first half of the current year, GDP growth stood at a robust 7.7%, providing a positive momentum that the NSO’s advance estimates suggest will continue into the second half, with a growth range of approximately 6.9%-7%. These estimates, relying on data from the first six-eight months of the year, play a crucial role in formulating the Union Budget.

Notably, the NSO anticipates a slight easing in the growth of Gross Value Added (GVA) for the economy, from 7% in the fiscal year 2022-23 to 6.9% in the current year. Furthermore, the nominal GDP growth is projected at 8.9%, falling short of the earlier Budget estimate of 10.5%. Economists caution that this could potentially result in the fiscal deficit exceeding the targeted 5.9% of GDP, possibly reaching around 6%.

Of specific concern is the expected significant drop in GVA growth for the farm sector, plummeting from 4% in the previous year to a mere 1.8% in the current fiscal year. Similarly, Trade, Hotels, Transport, Communication, and Services are projected to experience a notable deceleration in GVA growth, dropping from 14% in 2022-23 to 6.3%. Some economists express skepticism, suggesting these estimates might even be overly optimistic, particularly as concerns about consumption spending emerge.

“The concerning aspect in the GDP data is the weak consumption growth at 4.4%. This would be the slowest consumption growth in the past two decades barring the pandemic year of 2020-21,” cautioned Rajani Sinha, chief economist at CareEdge Ratings.

The NSO highlights that the share of private final consumption expenditure in GDP is expected to decrease to 56.9% this year, the lowest in at least three years, down from 58.5% in 2022-23. While the investment rate is anticipated to rise to nearly 30% of GDP, driven by government capital expenditure, higher consumption growth is deemed vital for private investments to assume the responsibility of stimulating the economy.

Manufacturing GVA growth is forecasted to accelerate to 6.5% in 2023-24 from a mere 1.3% the previous year, demonstrating a positive trend. Additionally, mining GVA is expected to rise to 8.1% from 4.6% in 2022-23, and construction GVA growth is predicted to remain solid at 10.7% this year, building on the 10% uptick recorded in the previous fiscal year.

Providing a numerical perspective, the NSO states, “Real GDP or GDP at Constant (2011-12) Prices in the year 2023-24 is estimated to attain a level of ₹171.79 lakh crore, as against the Provisional Estimate of GDP for the year 2022-23 of ₹160.06 lakh crore, released on 31st May, 2023.”

In parallel, the Reserve Bank of India (RBI) has taken a proactive stance to prevent potential risks to India’s accelerated growth. Governor Shaktikanta Das has pegged the third-quarter real GDP growth for this financial year at 6.5%, with a possible moderation to 6% in the January to March 2024 quarter.

It is essential to note that these projections by the NSO are preliminary, and factors such as improved data coverage, actual tax collections, expenditure on subsidies, and data revisions by source agencies could lead to subsequent revisions. The NSO underscores, “Users should take this into consideration while interpreting the figures.”

The First Revised Estimates for the fiscal year 2022-23 are scheduled for release on February 29, potentially influencing any revisions in the growth rates presented in the advance estimates released earlier.

Critics of the optimistic growth projections voiced their concerns. Aditi Nayar, chief economist at ICRA, highlighted, “The growth assumed for the second half is quite high, given the tepid outlook for agriculture amidst the weak kharif output and ongoing lag in rabi sowing, as well as the feared temporary slowdown in capex ahead of the General Elections.” She believes that agriculture and construction GVA growth for the second half may fall below the NSO estimates, suggesting a more cautious perspective.

Madan Sabnavis, chief economist at Bank of Baroda, echoed these sentiments, stating, “This growth estimate is much higher than what has been projected by the RBI and our estimate of 6.6%-6.7%.” He attributes the anticipated weak agriculture GVA growth to the projected drop in Kharif crop and the sluggish pace of Rabi sowing.

While the NSO’s initial estimates paint an optimistic picture of India’s economic growth for the fiscal year 2023-24, cautionary voices emphasize the potential challenges, particularly in sectors like agriculture and consumption spending. The coming months will reveal the extent to which these estimates align with the evolving economic reality on the ground.

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