The Real Reason Millionaires Are Leaving India Isn’t Taxes, Says Govt
Nidhi | Dec 30, 2025, 15:27 IST
IND vs SA: Anushka is all hearts as Virat Kohli scores his 53rd ODI century
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Millionaires have been leaving India for years, but the government now says taxes and lifestyle are not the real reasons. Economist and PM Economic Advisory Council member Sanjeev Sanyal explains that the deeper issue lies in a lack of structural change and competition within India’s business elite. With innovation slowing and risk-taking declining at the top, wealthy individuals increasingly choose to move their investments and families abroad. This article explores the government’s explanation, Kotak-EY data on migration plans, and why stagnation—not comfort—is driving India’s millionaire exit.
<p>IND vs SA: Anushka is all hearts as Virat Kohli scores his 53rd ODI century</p>
For years, India’s millionaire outflow has been explained through familiar causes—pollution, lifestyle upgrades, or high taxes. But the government is now pointing to a deeper and more structural reason.
Speaking on a podcast, Sanjeev Sanyal, economist and member of the Prime Minister’s Economic Advisory Council, said the migration of millionaires is not driven by comfort-seeking but by a lack of structural change and competition within India’s business elite.
His remarks align with what private data has been quietly showing for years. According to a joint survey by Kotak Private Banking and EY, more than one in five ultra-high-net-worth individuals in India, those with assets above ₹25 crore—are either planning to migrate abroad or have already done so.
Together, these insights suggest the issue is not personal lifestyle choice, but something far more systemic.
Data from Henley & Partners shows that:
Sanyal’s central argument focuses on how India’s largest industries are structured.
Many key sectors remain dominated by the same business families and groups for decades, leaving limited room for new entrants or disruptive ideas to scale. When competition weakens, innovation slows. Markets become stable, but stagnant.
In such an environment, wealth is incentivised to preserve itself rather than challenge the status quo. Risk-taking declines, and capital begins to look outward for ecosystems where experimentation is rewarded rather than resisted.
According to Sanyal, wealthy individuals often respond to limited domestic competition by moving their investment centres and family offices abroad, particularly to hubs like Dubai.
This shift is not about luxury living. It is about operating in systems that offer:
The Kotak–EY survey reinforces this structural explanation.
Respondents cited quality of life, healthcare, education, and taxation—but these were symptoms, not root causes. Underlying them was a broader frustration with weak policy support, limited institutional trust, and the difficulty of scaling innovation within traditional business frameworks.
When more than 20 percent of India’s ultra-wealthy are actively planning exits, it reflects systemic discomfort, not individual dissatisfaction.
Pollution and infrastructure stress are real, but they have existed for years. What has changed is the perceived reward for taking risk.
As Sanyal points out, when innovation struggles to gain ground, staying invested in the domestic system feels less attractive—even if tax rates remain unchanged.
Sanyal highlights a critical imbalance in Indian corporate behaviour.
Many large companies spend generously on corporate social responsibility and financial structuring, yet lag in serious investment in research, advanced manufacturing, and frontier technology.
Without sustained innovation spending, industries may remain profitable in the short term but lose competitiveness over time. For wealthy investors, this signals stagnation rather than opportunity.
While legacy sectors struggle with renewal, India’s startup ecosystem tells a different story.
Cities like Bengaluru show that young entrepreneurs are willing to take risks and accept failure. This culture has produced new ideas, companies, and global relevance.
Sanyal’s warning is that if large industries do not adopt a similar mindset, India risks becoming an economy where innovation thrives only at the edges, not at the core.
One of Sanyal’s most pointed observations is about failure.
Strong economies allow inefficient companies to fail, creating space for new players. Protecting incumbents indefinitely weakens competition and freezes capital.
When failure is avoided at all costs, wealth stops experimenting. And when experimentation stops, capital looks for ecosystems where failure is seen as part of progress.
The ongoing exit of millionaires is not a rejection of India’s growth story.
It is a signal that growth without churn, competition, and innovation creates unease at the top. Wealth is not fleeing chaos. It is responding to rigidity.
Millionaires are moving their capital, families, and businesses to systems where renewal feels possible and risk feels worthwhile.
Speaking on a podcast, Sanjeev Sanyal, economist and member of the Prime Minister’s Economic Advisory Council, said the migration of millionaires is not driven by comfort-seeking but by a lack of structural change and competition within India’s business elite.
His remarks align with what private data has been quietly showing for years. According to a joint survey by Kotak Private Banking and EY, more than one in five ultra-high-net-worth individuals in India, those with assets above ₹25 crore—are either planning to migrate abroad or have already done so.
Together, these insights suggest the issue is not personal lifestyle choice, but something far more systemic.
1. A Slow, Silent Exit That Has Been Building for Years
New Delhi, Dec 14 (ANI): Cricketer Virat Kohli, along with his wife and actor An...
Image credit : ANI
Data from Henley & Partners shows that:
- Around 5,100 millionaires left India in 2023
- About 4,300 exited in 2024
- Nearly 3,500 are projected to leave in 2025
2. Concentration of Power at the Top of Indian Industry
Many key sectors remain dominated by the same business families and groups for decades, leaving limited room for new entrants or disruptive ideas to scale. When competition weakens, innovation slows. Markets become stable, but stagnant.
In such an environment, wealth is incentivised to preserve itself rather than challenge the status quo. Risk-taking declines, and capital begins to look outward for ecosystems where experimentation is rewarded rather than resisted.
3. When Innovation Feels Blocked, Wealth Turns Defensive
This shift is not about luxury living. It is about operating in systems that offer:
- Faster regulatory approvals
- Clearer rules
- Less bureaucratic friction
- Predictable enforcement
4. Kotak–EY Data Confirms It’s Not Just Lifestyle Migration
Respondents cited quality of life, healthcare, education, and taxation—but these were symptoms, not root causes. Underlying them was a broader frustration with weak policy support, limited institutional trust, and the difficulty of scaling innovation within traditional business frameworks.
When more than 20 percent of India’s ultra-wealthy are actively planning exits, it reflects systemic discomfort, not individual dissatisfaction.
5. Why Taxes and Pollution Are Incomplete Explanations
India’s direct tax collection clocks 8 pc growth at Rs 17.05 lakh crore in April-Dec
Image credit : IANS
Pollution and infrastructure stress are real, but they have existed for years. What has changed is the perceived reward for taking risk.
As Sanyal points out, when innovation struggles to gain ground, staying invested in the domestic system feels less attractive—even if tax rates remain unchanged.
6. Low Investment in Innovation Where It Matters Most
Many large companies spend generously on corporate social responsibility and financial structuring, yet lag in serious investment in research, advanced manufacturing, and frontier technology.
Without sustained innovation spending, industries may remain profitable in the short term but lose competitiveness over time. For wealthy investors, this signals stagnation rather than opportunity.
7. A Sharp Divide Between Legacy Industry and Startups
Cities like Bengaluru show that young entrepreneurs are willing to take risks and accept failure. This culture has produced new ideas, companies, and global relevance.
Sanyal’s warning is that if large industries do not adopt a similar mindset, India risks becoming an economy where innovation thrives only at the edges, not at the core.
8. Why Accepting Failure Is Essential for Retaining Wealth
Strong economies allow inefficient companies to fail, creating space for new players. Protecting incumbents indefinitely weakens competition and freezes capital.
When failure is avoided at all costs, wealth stops experimenting. And when experimentation stops, capital looks for ecosystems where failure is seen as part of progress.
9. What the Millionaire Exit Really Signals
Migration
Image credit : Freepik
The ongoing exit of millionaires is not a rejection of India’s growth story.
It is a signal that growth without churn, competition, and innovation creates unease at the top. Wealth is not fleeing chaos. It is responding to rigidity.
Millionaires are moving their capital, families, and businesses to systems where renewal feels possible and risk feels worthwhile.