Everyone Should Know The Unmatched NRIs Contribution to The Indian Economy

Indians have been going to the farthest corners of the world since time immemorial. Even before the advent of steam engine-driven ships, Indians were trading with Middle East Asia, Africa, Southeast Asia, Central Asia, and Europe. The industrial revolution hastened the movement and immigration manifold. The latest leg of the immigration story, which started after the independence, is still being written.

As per the United Nations, of the 272 million global immigrants, Persons of Indian Origin (PIOs) make up close to 6.5%. Over time, the role of global Indians in their local economies, in the world economy, and their contributions to the Indian society and economy have only increased.

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The Unmatched NRIs Contribution To The Indian Economy

Globalization in the 1970s and 1980s, and the liberalization of the Indian economy in 1991 resulted in more Indians going abroad to study, work, travel, and explore. Many of them stayed back and created “Little Indias” where they lived. While those who came back brought with them world-class practices, knowledge, technology, and access.

The ones who still reside overseas have strong and deep familial, cultural, and financial ties with India. These ties push them to do more for India and make them an asset that we cannot possibly value enough.

Therefore, it is high time that we recognize NRIs contributions to the Indian economy, society, polity, global soft power, and cultural & moral authority.

More than Dollars

Non-Resident Indians certainly contribute directly to the Indian economy by way of their remittances and investments. But viewing their contributions only with the financial lenses would be an injustice to them as well to us. Their non-monetary contributions have far greater and far-reaching benefits compared to their direct remittances.

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Inward Remittances as Direct GDP Contribution

The total immigrant population of PIOs is close to 18 million as per the UN report International Migration 2020 Highlights. This is by far the largest block of immigrants from any one country. The NRI population, at 13.5 million, is merely 1% of the total 1.35 billion population of India. Still, their direct contribution to the Indian GDP was an impressive 3.4% in 2017.

According to the UN report, India has remained the top country to receive the largest sum of remittances for almost a decade. In 2019 alone they amounted to USD 83 billion.

The huge flow of remittances goes on to fund many things:

• Managing day-to-day expenses.
• Buying consumer durables (like appliances) and fixed assets (tractors and cars).
• Building or buying property.
• Investing in equity, MFs, deposits, PPF, and bonds.

Foreign Reserves

The foreign exchange reserves of a country are an indicator of its financial strength and strong inflows add to the creditworthiness. India faced a severe balance of payment crisis in 1990-91 when we had to mortgage our national gold reserves to get bailout loans from the IMF.

One of the most reliable sources of foreign exchange inflows is the remittances from the diaspora. Every dollar (or Euro or Dinar) transferred by NRIs adds to India’s creditworthiness and foreign reserves. They make up nearly 25% of India’s total foreign reserves!

Tourism

NRIs are big spenders when they visit home. Not only do they travel extensively with families and friends, but they also share their memories with everyone. It has now become common among NRIs to invite their friends from their countries of residence to travel across India.

The culture of inviting foreigners to their weddings, family functions, and religious ceremonies is gaining popularity. Now many places in India are among the top choices for celebrity and destination weddings. This gives a great boost to the travel and tourism economy, the wedding market, and adds to our foreign reserves.

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Global Social, Business, and Political Clout

In many countries non-resident Indians make up to a quarter of their total population, significantly affecting their political and economic interests in favour of India. Even in countries where they are under 10% or even 5% of the population, they throw punches way above their weight.

For example, PIOs form only around 3% of the Canadian population but in the Canadian parliament’s House of Commons, 22 members are of Indian origin out of 338, making up 6.5% of the total. More so, 3 PIOs are senior ministers in the incumbent government including the Minister of defense.

Similarly, in the UK, there are 15 MPs in the House of Commons in the British Parliament. Rishi Sunak, the current Chancellor of the Exchequer (Finance Minister), is also pipped to be the next Prime Minister of Britain if the current PM Boris Johnson steps down or Tory’s return in 2024.

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The United States of America also has its first-ever Asian American, Indian-origin, Female Vice President in Kamala Harris. Along with her, 55 Indian-Americans are appointed to key positions by the Joe Biden administration.

Indians are currently heading titanic multinationals – Indra Nooyi (PepsiCo), Satya Nadella (Microsoft), Sundar Pichai (Alphabet), Parag Agarwal (Twitter), Leena Nair (Chanel), Shantanu Narayen (Adobe), Arvind Krishna (IBM), and Jayshree Ullal (Arista Networks). The list is limitless!

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Soft Power

The educational and economic strength came from the cultural mores imbued with ethics, honesty, and the never-give-up attitude. Other countries started to gradually understand the potential of the Indian diaspora which resulted in them gaining economic and political clout.

Throughout history, one thing never changed – the Indian soft power. The cultural diversity, religious pluralism, racial & ethnic coexistence, and spiritual superiority of India have always fascinated the world. But with NRIs celebrating Indian festivals, with gusto in their localities, more people now are enchanted by the soft power.

People from the world over now enjoy Bollywood and other Indian songs and dances. Indian food is now considered one of the richest cuisines served at Michelin star restaurants. More people today embrace Ayurveda, Yoga, and Indian Spirituality learnings than ever.

Giving Back

The NRI not only gives back to the country in the form of investments and remittances. They are equally involved in supporting the causes that are close to their hearts. This support comes in many forms – charities, trusts, donations, direct actions, policy changes, and financial interventions.

For example, the Dakshana Foundation established by Mohnish Pabrai is focused on alleviating poverty by investing in education for the meritorious students from the financially weaker sections. They model their residential schools on the lines of Super 30 of the celebrated educator Anand Kumar.

Many NRIs have helped their country in times of crises – whether it was the wars and conflicts, US-India nuclear deal, or humanitarian crises. The most recent example is of thousands of NRIs mobilizing millions of USD in aid during the ravaging second wave by way of Oxygen tanks, concentrators, and medicines.

Thank You, NRIs

Indian Prime Minister Narendra Modi went on to say, “World’s keenness to engage with India has risen. Our diaspora can play a vital role in furthering India’s engagement with the world”. All Indian governments have recognized and offered more tangible benefits to the NRIs as a token of gratitude.

NRI have, are, and will always be the sons and daughters of the homeland. They may have to leave India for many reasons, but they make sure that India never leaves their hearts. And they show their love for their country not by paying lip service, but in concrete and material ways that matter.

As the new wave of technologies and global realities sweep over the world, we are sure that with the increasing clout of Indians – here and abroad – India will emerge on top of the world order. We cannot thank our NRIs enough for their Contribution to The Indian Economy.