Why More and More Rich Indians Are Leaving the Country?
Nidhi | Apr 18, 2025, 11:35 IST
India’s economic growth may be on the rise, but the nation’s wealthiest are seeking exits. The Kotak Wealth Report 2023 reveals that over 21% of ultra-rich Indians are planning to migrate abroad, driven by dissatisfaction with India’s healthcare, education, infrastructure, and tax policies. This migration trend underscores a deeper concern — that while the economy grows, it isn’t translating into a better quality of life for those who fuel its success, casting a shadow on the country’s future development.
India's economic narrative is one of paradoxes. On the one hand, it is celebrated as the fastest-growing major economy, with a GDP growth of 8.2% in FY2023-24, driven by robust performances in manufacturing and services sectors . On the other hand, its wealthiest citizens — the ones who generate substantial revenue, employment, and global visibility — are planning their exits.
A joint survey by Kotak Private Banking and EY reveals that over 1 in 5 ultra-high-net-worth individuals (ultra-HNIs) — those with assets exceeding ₹25 crore(about $30 million). — are either in the process of migrating abroad or are planning to do so.
The Kotak-EY report reveals that the wealthiest Indians are driven to migrate primarily due to three factors:
These are not mere aspirations of luxury; they are indicators of dissatisfaction with core public services and policy support back home.
Departure of the Wealthy: A Glaring Dent in India’s Growth Story
At a glance, India’s economy is thriving with 8.2% GDP growth in FY2023-24, but if growth doesn’t inspire confidence in its top contributors, the development narrative falls apart.
India has seen a consistent rise in outward remittances. Under the Liberalised Remittance Scheme (LRS), affluent Indians sent $27.14 billion abroad in FY 2022–23, up from $19.61 billion in FY 2021–22 — a 38.4% year-on-year increase.
A large chunk of this is routed through real estate investments, education, and long-term residency programs abroad. This redirection of capital depletes domestic private investment, which forms a crucial pillar of job creation and innovation.
While foreign direct investment (FDI) inflows into India have slowed (dropping to $71 billion in FY 2022–23 from $84.8 billion in FY 2021–22), wealthy Indians are increasingly choosing stable, regulated economies for their capital — citing concerns around policy volatility, tax unpredictability, and institutional trust.
Though India’s corporate tax was slashed to 22% (without exemptions) in 2019, personal income tax remains steep for high earners, with effective rates going up to 42.74% for those earning above ₹5 crore annually.
But it's not just about high rates — it’s the complexity and inconsistency of the Indian tax regime that pushes people away. Frequent amendments, retrospective taxation, and opaque enforcement create an environment of uncertainty.
Compare this with Dubai (0% personal tax) or Portugal’s NHR scheme offering tax exemptions for up to 10 years — and it’s clear why Indian HNIs are looking outward.
India’s economic rise is also marked by widening inequality. According to the World Inequality Report 2022:
When development is so disproportionately distributed, it’s no surprise that the wealthy seek global mobility — while the poor remain stagnant. This external circulation of wealth erodes the foundation of inclusive development.
Historically, India has grappled with a brain drain — engineers, doctors, and researchers leaving for better opportunities. Now, that has evolved into a wealth drain.
India ranked second globally in millionaire outflow in 2023, with 6,500 millionaires projected to leave — just behind China. This is expected to rise to 8,000 annually by 2025, according to Henley & Partners.
These aren’t just rich individuals — they’re job creators, startup funders, and sector builders. Losing them weakens national resilience.
Despite Smart City initiatives, India’s cities underperform in liveability. According to World Bank’s 2023 Ease of Living Index:
These aren’t luxury demands — they reflect the daily gaps in essential services.
India has over 52 million pending court cases, with civil suits often dragging for over a decade.
In contrast, countries offering investment visas have tech-driven, time-bound, and efficient judicial frameworks. For the wealthy — who deal in large-scale ventures — institutional unpredictability makes Indian systems high-risk and inefficient.
India ranked 96 out of 180 countries in Transparency International's Corruption Perceptions Index 2023 — a major red flag for global investors.
Ongoing issues like bureaucratic delays, policy flip-flops in tech, crypto, and data, and a slow regulatory response system further discourage business confidence.
This undermines India’s ambition to position itself as a global innovation and manufacturing hub.
India’s growth is undeniable — but if the people who benefit the most from it want to leave, we must pause and reflect.
Are we measuring the right things? GDP and unicorns are great, but if our cities are unsafe, our air unbreathable, our courts clogged, and our schools underfunded — can we really call this progress?
When the rich migrate, they don’t just leave with their money — they take their trust, investments, and leadership with them. That’s not just a personal decision. It’s a national signal.
As India climbs the economic ladder, we must ask: Growth for whom — and at what cost?
A joint survey by Kotak Private Banking and EY reveals that over 1 in 5 ultra-high-net-worth individuals (ultra-HNIs) — those with assets exceeding ₹25 crore(about $30 million). — are either in the process of migrating abroad or are planning to do so.
Why Are India’s Wealth Creators Leaving?
- Better quality of life and infrastructure abroad
- Superior healthcare and education
- Favorable taxation, legal, and business environments
Departure of the Wealthy: A Glaring Dent in India’s Growth Story
1. Capital Flight Weakens Domestic Investment Ecosystems
A large chunk of this is routed through real estate investments, education, and long-term residency programs abroad. This redirection of capital depletes domestic private investment, which forms a crucial pillar of job creation and innovation.
While foreign direct investment (FDI) inflows into India have slowed (dropping to $71 billion in FY 2022–23 from $84.8 billion in FY 2021–22), wealthy Indians are increasingly choosing stable, regulated economies for their capital — citing concerns around policy volatility, tax unpredictability, and institutional trust.
2. India’s Tax Environment: Is It Too Harsh or Too Arbitrary?
But it's not just about high rates — it’s the complexity and inconsistency of the Indian tax regime that pushes people away. Frequent amendments, retrospective taxation, and opaque enforcement create an environment of uncertainty.
Compare this with Dubai (0% personal tax) or Portugal’s NHR scheme offering tax exemptions for up to 10 years — and it’s clear why Indian HNIs are looking outward.
3. The Inequality Paradox: Growth That Excludes
- The top 1% of Indians hold over 22% of national income, while the bottom 50% hold just 13%.
- The average wealth of the top 10% is ₹63 lakh, while for the bottom 50%, it’s only ₹66,000.
4. Brain Drain is Now a “Wealth Drain”
India ranked second globally in millionaire outflow in 2023, with 6,500 millionaires projected to leave — just behind China. This is expected to rise to 8,000 annually by 2025, according to Henley & Partners.
These aren’t just rich individuals — they’re job creators, startup funders, and sector builders. Losing them weakens national resilience.
5. Real Estate, Healthcare, and Education: The Gaps Remain Gaping
- 39 of the world’s 50 most polluted cities are in India.
- Public healthcare spending is only 2.1% of GDP, compared to 5% in China and 9% in OECD nations.
- Education spending stands at just 2.9% of GDP, far from UNESCO’s recommended 6%.
6. Legal and Judicial System: Slow, Costly, and Unpredictable
In contrast, countries offering investment visas have tech-driven, time-bound, and efficient judicial frameworks. For the wealthy — who deal in large-scale ventures — institutional unpredictability makes Indian systems high-risk and inefficient.
7. The Image Problem: Corruption, Red Tape, and Political Instability
Ongoing issues like bureaucratic delays, policy flip-flops in tech, crypto, and data, and a slow regulatory response system further discourage business confidence.
This undermines India’s ambition to position itself as a global innovation and manufacturing hub.
Final Thoughts: What Does This Say About India’s Development Model?
Are we measuring the right things? GDP and unicorns are great, but if our cities are unsafe, our air unbreathable, our courts clogged, and our schools underfunded — can we really call this progress?
When the rich migrate, they don’t just leave with their money — they take their trust, investments, and leadership with them. That’s not just a personal decision. It’s a national signal.
As India climbs the economic ladder, we must ask: Growth for whom — and at what cost?