7,000 HNIs Left India In 2017. What Does This Mean?
India is sure getting richer. India is globally the sixth wealthiest nation with wealth equal to $8,230 million. By the end of 2017, the number of high-net-worth individuals (HNIs) in India stood at 330,400. By definition, an HNI is someone who has assets worth $1 million and upwards.
According to media reports, the combined worth of these worthy people is Rs 15,300,000 crore – this is roughly the combined market value of all the companies listed on the Bombay Stock Exchange.What is alarming is the fact that these worthy gentlemen are seen exiting the country.
Leaving the nest
The 2017 Global Wealth Review: Worldwide Wealth and Wealth Migration Trends says that that 6,000 HNIs had left the country in 2016. The New World Health said that 7,000 ultra-rich Indians relocated abroad in 2017. Back in 2015, the number stood at 4,000.
Globally, India has seen the second-highest exodus of millionaires, next only to China where 10,000 HNIs changed their domicile in 2017. Besides, Turkey, the United Kingdom, France and the Russian Federation have also witnessed large outflows.
Triggering the move
Usually, the exodus can be pegged on to unfavourable tax laws and economic slowdown. Demonetisation, too, could have had a role to play, say experts. The Global Wealth Migration Review notes that woman and child safety, climate, pollution, space, nature, scenery (lifestyle) , financial reasons, educational opportunities for children, work and business opportunities, tax structure, healthcare system, religious tensions and standard of living are the most common reasons that make HNIs decide to leave the country.
Destinations of choice
Super-rich Indians like to move to the United States, the UAE, Australia and New Zealand. Rich Chinese largely prefer the US, Canada and Australia.
The balancing act
The New World Wealth report noted that this mass departure of the uber rich should not be alarming for India or China.
“The outflows of HNWIs from these countries are not particularly concerning as they are still producing far more new HNWIs than they are losing. Also, once the standard of living in these countries improves, we expect several wealthy people to move back,” the report said.
However, it also states that such migration may not be a good sign.
“HNWIs are often the first people to leave. They have the means to leave, unlike middle-class citizens. If one looks at any major country collapse in history, it is normally preceded by a migration of wealthy people away from that country.”