Why Are India's Wealthy Peoples Leaving and Where Are They Going?

During 2023, India counted 2.83 lakh UHNIs, who owned over Rs 25 crore worth of assets, while their total wealth reached Rs 2.83 lakh crore. A recent survey shows the UHNIs in India will reach 4.3 lakh individuals who possess Rs 359 lakh crore combined wealth by 2028.

Gautami Gavankar, who serves as President of Kotak Mahindra Bank, argued that wealthy Indians choosing to relocate should not be regarded as capital that escapes from India. She explained that existing financial limits for investments stop money from leaving the country when someone changes their residence.

The Slowing Exodus of India's Wealthy

Researchers from Henley & Partners found that the migration of millionaires from India started to decrease during their examination from the previous year. The projected HNIs who would leave India in 2024 numbered 4,300 yet this count stood significantly lower than past migration levels.

Why Are the Rich Leaving India?

Historically, the main reasons why millionaires chose to migrate included favourable tax rates, strong economic opportunities, and stable political conditions. The Henley & Partners 2024 report demonstrates that the migrating priorities have undergone changes. 

The factors that influence high-net-worth individuals to leave India now consist of life quality and educational opportunities for children, climate change adaptability, and future wealth protection. Preserving wealth across generations has become a key priority among people who are considering migration.

The Kotak Private survey reports that Indian super-rich individuals aim to enhance their quality of life and secure better healthcare services, education, and lifestyle improvements. The survey results show that business restructuring stands out as the primary motivator behind their migration choices, according to 67% of respondents. The survey classifies this movement as a "future-focused investment because parents seek world-class education for their children.

Survey results show that professional occupation holds greater importance for migration purposes rather than entrepreneurial or inheritance-based activities. The demographic group of UHNIs spanning 36 to 40 years old and those older than 61 years show the greatest interest in migrating.

Millionaire Migration Trends

The outflow of Indian millionaires continues to decrease while retaining its status as one of the significant migration trends in the country. The projected number of wealthy Indians who will relocate abroad in 2024 amounts to 4,300 people while showing a downward trend compared to preceding years. The third position in global millionaire outflow belongs to India after China and the United Kingdom.

The UAE stands at the top of destination choices for Indian millionaires who plan to migrate to the country since it expects to receive a total of 6,700 millionaires in 2024. The popular migration spots for wealthy individuals consist of the United States, Singapore, Canada, and Australia.

Ultra-High Net Worth Individual Growth

The exodus of Indian wealthy individuals to foreign countries does not hinder the substantial growth of the UHNW population in India. The future projections of Ultra-High Net Worth Individuals in India indicate substantial growth, according to Knight Frank's Wealth Report 2024.

The UHNW population of India is expected to expand by 50% during a five-year time span. The Indian economy experiences a prosperous expansion supported by its consistent 7% annual GDP growth rate and thriving technology and e-commerce business sectors.

The exodus of wealthy individuals does not present a problem for India because the country creates more new HNWIs through wealth creation than the number leaving for foreign residence. The Indian economy receives positive contributions from millionaires who emigrate since they continue to maintain business operations and residential properties within the country.

Where Are the Wealthy Heading?

Most rich individuals from India show the same migration preferences as other millionaire groups by choosing to live in the United Arab Emirates (UAE). The UAE positions itself as a leading destination for HNIs due to its non-taxation of individual income and 5% value-added tax on goods, which will attract 6,700 individuals in 2024. Different wealthy individuals select 

Australia, Singapore, the United States, and Switzerland are their preferred destinations. Wealthy individuals choose these countries because they provide vital elements that matter to high net worth individuals including political security together with reduced taxation rates and advanced educational systems alongside improved life quality standards.

According to the Henley & Partners 2024 report, India stands as the third-highest nation in terms of millionaire migration, following China and the United Kingdom.

In 2024, China will experience 15,200 HNWIs departing, the highest number of millionaires leaving any country ever recorded. General wealth growth in China has been decreasing in recent years, which has made the reported millionaire outflows more worrisome than usual. China experienced powerful economic growth from 2000 to 2017, yet wealth accumulation and millionaire population expansion have decreased since that period. Japanese territory now joins Singapore, the USA, and Canada as established exits for Chinese millionaires.

The United Kingdom may lose 9,500 HNWIs in 2024, which would create a historical record, while London remains the most vulnerable area. UK millionaires choose to spend their money in Paris, Dubai, Amsterdam, Monaco, Geneva, Sydney, and Singapore, as well as retirement locations such as Florida along with the Algarve Malta and the Italian Riviera.

The Henley & Partners 2024 report confirms India's continuous loss of millionaires to the UAE but emphasises that these outflows are not a cause for concern since the country creates more new high-net-worth individuals than the number leaving for foreign residency. The majority of wealthy Indian immigrants maintain their business ventures and additional properties within the country, which indicates a positive trend.

The migration of millionaires from China to the UK to India was followed by substantial movements from South Korea, Russia, Brazil, South Africa, Taiwan, Nigeria and Vietnam. The UAE and the USA lead the list of 10 countries that will receive the most millionaire immigrants in 2024, followed by Singapore and Canada and then Australia and Italy, with Switzerland, Greece, Portugal and Japan completing this list.