Why 6,500 Millionaires Are Expected to Leave India This Year
The Henley Private Wealth Migration Report (2023) has recently shed light on an intriguing trend: India is set to experience a net outflow of 6,500 high-net-worth individuals (HNWIs) in 2023. This follows a similar trend from the previous year when 7,500 HNWIs left the country. This places India as the second-worst performer globally in terms of HNWI retention, with China leading the pack with a loss of 7,500 such individuals.
HNWIs are individuals with investable wealth, or liquid financial assets, of at least US$1 million, equivalent to approximately Rs 8.2 crore. This wealth excludes primary residences, exquisite artwork, and antique collectables, focusing solely on funds that can be readily converted into cash.
The report also highlights global trends, with Australia, the United Arab Emirates (UAE), Singapore, the United States, and Switzerland expected to be the top five destinations for net inflows of HNWIs in 2023. Conversely, the largest net outflows of HNWIs are anticipated from China, India, the United Kingdom (UK), Russia, and Brazil. These predictions are based on data provided by New World Wealth, the agency that supplies the data for the report.
Despite the projected significant outflow, India remains among the top ten richest countries globally, ranked 10th in the W-10 grouping (World’s wealthiest countries). Out of a population of 1.428 billion, India is home to 3,44,600 HNWIs, 1,078 centi-millionaires (individuals with wealth exceeding $100 million), and 123 billionaires (individuals with wealth exceeding $1 billion or Rs 8,200 crore).
So, why are India’s wealthy choosing to migrate? According to Juerg Steffen, CEO of Henley & Partners, the movements of rich families can serve as an indicator of a country’s economic outlook. Countries like the UAE and Singapore, with their easy visa and stay policies for Indians, are attractive destinations. The UAE, with its government-backed Golden Visa, serves as ‘the fifth city for India’, offering prolonged stays and favourable tax structures.
These countries also act as stepping stones for HNWIs, making it easier for them to apply for residency or citizenship in first-world countries. These individuals are sensitive to potential threats to their wealth and often relocate when circumstances deteriorate. Hence, Switzerland, the UAE, and Singapore are considered safe havens for wealth security. These countries are also important centres of global commerce.
Political stability, low taxation, and personal freedom have traditionally been key factors in their decision-making. However, the focus is shifting towards intangible elements that impact their children’s prospects, quality of life, and the legacies they leave behind. Steffen suggests that the outflow often indicates a drop in confidence in the country. This explains why a significant amount of private wealth is flowing into countries that offer a robust regulatory environment, respect for the rule of law, and guaranteed economic freedom, albeit to varying degrees.
