Overseas Indians are considered to be the most successful communities in the world. They have made significant contributions to the economy by adding in considerable measure of knowledge and innovation. The majorly include Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Corporate Bodies (OCBs). They are the vital sources for foreign direct investments into the country. This way, they help in the progressive development of various segments of Indian economy.
“We have been sourcing services and components out of India since 1998. On an average, we have grown the sourcing volume by about 10 per cent per year”
Managing Director and CEO, Mercedes Benz India
India has the second largest Diaspora in the world. The overseas Indian community estimated at over 25 million is spread across every major region of the world. It serves as an important bridge to access knowledge, expertise, resources and markets for the development of country of origin. In India, the Ministry of Overseas Indian Affairs (MOIA) is a nodal organisation for the overseas Indians. It has been developing an inclusive agenda for the Diaspora to benefit from India’s development, as well as drawing up a road map for establishing Indian Diaspora networks. It is engaged in several initiatives with overseas Indians in terms of promotion of trade and investment. It has also set up Overseas Indian Facilitation Centre (OIFC) for investment and business related activities.
The Ministry also recognizes that the various States are important players in our Union of States. Therefore States are encouraged to develop a stake in the entire process of engagement with the diaspora and become natural stakeholder partners
India has the world’s second largest diaspora (next to China) with a substantive presence in all the six continents. Indian diaspora constitutes a significant economic, social and cultural force in the countries around the world. Spread across 110 countries, their enterprise, economic strength, education and professional skills are widely recognized. The bond which holds this vast and diverse overseas Indian community together with India is Indianness.
The Ministry of Overseas Indian Affairs (MOIA) has been set up with the objective to promote, nurture and sustain a mutually beneficial and symbiotic relationship between India and its diaspora. The Ministry also recognizes that the various States are important players in our Union of States. Therefore States are encouraged to develop a stake in the entire process of engagement with the diaspora and become natural stakeholder partners. Diaspora has made immense contribution to their State of origin through remittances, foreign direct investment (FDI), transfer of knowledge and entrepreneurial networks.
Contribution of Indian diaspora to India’s economy and society is a matter of great pride and achievement for Indians, the world over. An intangible contribution of the Indian Diaspora is in the form of social remittances or the flow of ideas that have a significant impact in the areas of education and health. It is also stated that primary and higher education as well as skill development are among India’s most important challenges and remain as the best possible area of partnership for overseas Indians.
Indian diaspora sends US$27 billion in remittances back to India each year, the largest sum for any country. They also contribute knowledge of the world, international networks, new ideas, technologies and markets to their homeland. With the support of its diaspora, India has become a world leader in business process outsourcing, information technology and pharmaceuticals.
It is observed that there is a strong case for the Indian diaspora to step up their level of engagement with India. The global experience of the effects of overseas networks as sources and facilitators of trade and investment, purveyors of remittances and as brain banks may be substantial.
The development of rapid communications, ease of international travel, liberal host country policies, etc have helped Indian Diaspora to simultaneously integrate into their respective host countries as well as maintain their socio-economic and political links with India and members of same-group ethnicities dispersed around the world. Such networks are useful to multinationals including emerging Indian multinationals. They also facilitate globalization process in India.
Some sections of the Indian Diaspora have acquired global identity and are promoters of the emerging concept of global citizenship. Besides, politically engaged diaspora youth are a great asset because of their intellectual capital, enthusiasm, dedication and energy. Also, diaspora members, their organizations and companies can play host to interns from India which will positively affect India’s understanding of countries where Diaspora has a sizeable presence.
In other words, current relationship between the Indian Diaspora and India serves as a strategic tool in India’s emergence as a Global Power.
Governing Framework at Central Level
The ‘Overseas Indian Facilitation Center (OIFC)‘ has also been set up the Ministry of Overseas Indian Affairs in public-private partnership with Confederation of Indian Industry (CII). The Center acts as ‘one- stop shop’ for serving the interests of the Indians located abroad. Besides, there is ‘Ministry of Finance’ which deals with financial aspects relating to overseas Indians. The Indian Investment Centre is an autonomous body functioning under the Ministry of Finance, promoting foreign private investment including investments by NRIs, PIOs and Overseas Corporate Bodies.
There is the ‘Foreign Direct Investment (FDI) Policy’, which governs the various aspects of foreign investment in India. This policy aims to attract FDI, in all the permitted sectors of Indian economy, both by foreign and overseas investors. There are mainly two routes permissible for foreign investments, such as, the Automatic route and the Government route. NRIs/PIOs are also permitted to open bank accounts in India out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India.
Suggestions and Future Prospects
The global Indian Diaspora has grown tremendously in numbers, stature, wealth and influence over the past decade. It will be in India’s best interest to engage with her diaspora. Doing so in an effective and relevant manner will enable members of this dynamic group to capitalise upon the emerging business and investment opportunities in India and thereby to contribute towards India’s future growth and development.
Today, the diaspora is not courted for its wealth only, but also for its knowledge, technology as well as political and economic influence. The diaspora also finds that there are many reasons to engage with India with much pride. Examples of NRIs and PIOs returning to India, to invest their savings and generate employment or to take up leading positions in industry/society and transfer their know-how, is now a common feature. Similarly, Indian corporations, leveraging off the expertise of the diaspora, to tap international markets and expand their global footprints, are also no longer rare testimonials.
Indian diaspora with its unique knowledge and networks can help to deepen mutual understanding, forge productive business partnerships and promote trade and investment flows all over the world. This will further help in deepening of the ties between India and world economies and thus help in developing a more competitive, industrious and vibrant relationship.
In its efforts towards deepening India’s engagement with its diaspora, the Indian Government has fostered a host of initiatives in philanthropy, development, education and investment. The Ministry of Overseas Indians has taken up many initiatives not only to help interaction with Indian communities around the world but also help them find their roots.
(This is the beginning of a series on Invest India. In the next issue we will bring you Government of India initiatives. We also take a look at opportunities in states. This issue we start with Andaman and Nicobar Islands)