Are millionaires fleeing India? Here’s what we know

In April, AfrAsia Bank released the 2019 Global Wealth Migration Review (GWMR) that shows 5,000 millionaires from India migrated outside the country in the year 2018. These 5,000 people accounted for 2% of the total wealth held by millionaires in India. The report also said that Mumbai is the country’s wealthiest city and predicted that over the next 10 years, India will outperform countries like UK and Germany in terms of wealth generation. Cities like Delhi, Bangalore, and Hyderabad are expected to drive this growth.

The GWMR found that the countries with the most privately held wealth are in the following order: United States, China, Japan, United Kingdom, Germany, India, Australia, Canada, France, and Italy.

Global wealth increased by 26% in the past decade, and mostly Asian countries are being credited for this boost. This wealth refers to the total wealth held by private individuals in each country, explains the GWMR.

India, Sri Lanka, and China were the three top-performing Asian countries that grew wealth by 96%, 94%, and 120%, respectively.

UK saw a 4% growth in private wealth despite its public voting in favour of Brexit. In contrast, European countries like France and Italy saw declines of 7% and 14%, respectively.

What the GWMR says about India’s millionaires

The report says that India was the sixth wealthiest nation in the world with $8,148 billion in 2018. US, China, Japan, UK, and Germany ranked higher than India while Australia, Canada, France, and Italy, ranked lower.

Between 2017 and 2018, India saw a 1% reduction in its private wealth. Regardless, the report predicts that India will surpass the UK to become the country with the fourth-most wealthiest private individuals, over the next 10 years.

The GWMR report says that 48% of wealth in India is held by millionaires. The Indian city with the most wealth is Mumbai, and it also ranks among the top 20 wealthiest cities in the world.

The report says that the total wealth in Mumbai amounts to $941 billion, which is more than cities like Toronto, Houston, Osaka, Seol, Paris, Geneva, Frankfurt and Shenzhen.

Delhi is the second wealthiest city in India, and is expected to grow in wealth over the next decade.

In the next 10 years, India is expected to grow its personal wealth by 180% because of its entrepreneurs, IT services, and the manufacturing and financial sectors, says GWMR.

China is expected to sustain its current rate of 120% wealth creation because of its entertainment, IT, healthcare, and automotive industries. GWMR says that the Chinese film industry is booming and putting films into world’s top 10 grossing list.

“Growing box office receipts are a good indicator of a growing middle class, so this is a particularly good sign for China”, says GWMR.

The report also found that 5,000 millionaires,  who contributed for 2% of the wealth held by all millionaires in India, migrated out of the country in 2018. These migration millionaires prefer to settle in Australia, the US, and Canada, because of the taxation policies and educational opportunities.

China also saw an exodus of millionaires—5,000 who account for 2% of all wealth held by Chinese millionaires.

Russia, Turkey, France, UK, Brazil, Saudi Arabia, and Indonesia also saw at least 1,000 millionaires migrate to other countries.

Did the Indian economy take a hit when millionaires migrated?

The GWMR explains that it is important to track the migration patterns of a country’s millionaires because these wealthy people usually settle overseas when they perceive problems like economic instability, religious intolerance, and lack of business opportunities.

The report adds, “… if one looks at any major country collapse in history, it is normally preceded by a migration of wealthy people away from that country.”

However, the outflow of millionaires from India and China is not a cause for concern because both countries are producing more millionaires than they are losing, says GMWR.

“Also, once the standard of living in these countries improves, we expect several wealthy people to move back”, said the report.

India currently ranks ninth on the list of cities with the most millionaires with 3,27,100 people. It is also the third country with the most resident billionaires— 118— close on the heels of China and the US.

Rhea Arora is a Staff Writer at Qrius