Why India’s rich are leaving

Hello, this is Amala Balakrishner, writing from Singapore. This week, I look at migration trends among India’s wealthy and uncover what is pushing them out, and keeping them rooted in India.

This report is from this week’s CNBC’s “Inside India” newsletter which brings you timely, insightful news and market commentary on the emerging powerhouse and the big businesses behind its meteoric rise. Like what you see? You can subscribe here.

Each weekday, CNBC’s “Inside India” news show gives you news and market commentary on the emerging powerhouse businesses, and the people behind its rise. Livestream the show on YouTube and catch highlights here. 

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U.S.: Sunday-Thursday, 23:00-0000 ET
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The big story

Thirty-seven-year-old Indian national KM is three months away from calling Dubai his second home.

The start-up founder — who recently amassed nearly 100 million Indian rupees ($1.16 million) in assets and crossed the high-net-worth threshold — is relocating from India’s financial capital, Mumbai, to enjoy lower taxes and a better lifestyle.

The start-up founder, who only wished to be identified by his initials due to privacy concerns, is among a sizable number of wealthy Indians looking to relocate from the South Asian powerhouse.

While there is no fixed definition of who qualifies as “rich,” a widely accepted threshold for individuals in the high-net-worth bracket is 50 to 250 million Indian rupees, while those whose wealth exceeds 250 million Indian rupees are considered ultra-high-net-worth. Affluent individuals are those with a net worth between 10 million and 50 million Indian rupees.

India is home to 85,698 individuals with assets exceeding $10 million, according to a recent report from Knight Frank. That accounts for 3.7% of the global population with that net worth, more than the U.K.’s 2.4%, but less than China’s 20.1%.

With India’s booming economy poised to overtake Japan to become the world’s fourth largest, and a time of strong market returns, I was puzzled by KM’s decision to relocate.

KM told me that it was an “instinctive decision.”

“India’s economy is booming and the large consumer pool is beneficial for my company. So, I will keep it as my business headquarters, but I feel Dubai is a better place to live in,” he said.

KM previously considered relocating to either Singapore, Portugal or Spain, but settled on Dubai because of its “tax-free structures, good education system, global diaspora and proximity to Mumbai.”

A recent survey by wealth management firm Kotak Private, conducted in association with consultancy EY, revealed that one in five of the 150 ultra-high-net-worth individuals polled plan to emigrate from India while retaining their Indian citizenship.

Such a phenomenon comes as wealthy Indians are considering other residencies for strategic purposes, rather than a permanent relocation, Himanshu Kohli, co-founder of multi-family office Client Associates, told me.

“Their decisions are typically driven by long-term generational thinking rather than dissatisfaction towards India,” he said.

“This isn’t about abandoning India — it’s about expanding one’s footprint and ensuring families have global options in an increasingly interconnected world,” Kohli noted, adding that many remain invested in India through start-ups and real estate.

Besides the United Arab Emirates, several countries such as Singapore, Portugal, the U.K. and the U.S. have rolled out attractive initiatives to attract the wealthy.

These include significantly lower tax rates, which are more favorable than India’s. For instance, the UAE has zero taxes on personal income, capital gains and inheritance.

By contrast, India employs a progressive income tax structure, where individuals earning around 1.2 million Indian rupees are slapped with a 15% tax, which increases with their income bracket. Meanwhile, the country has a 12.5% tax on most long-term capital gains.

India’s higher tax structure compared to other countries has led to a perception that the wealthy are emigrating to avoid taxes. That, however, “is not the whole story,” Dhruba Jyoti Sengupta, CEO of Wrise Wealth Management Middle East, tells me.

“India, still views wealth within domestic constraints,” he said. By this, he means that India’s policies focus on domestic wealth management rather than building strategies with global exposure.

And so, Sengupta argues that India’s wealthy “are not fleeing taxes. They’re buying freedom, mobility, peace of mind and the ability to plan for the future. As the next generation is coming up, they want options.”

He also flagged regulatory challenges in wealth and legacy planning, as well as social concerns such as traffic congestion in metropolises, pollution, and infrastructure gaps, as other pressing issues prompting migration.

India’s wealth drain is not unique to the country.

While the reasons for relocating may differ, the issue remains a perennial challenge, especially in developing economies, as it undermines investor confidence and long-term growth.

The movement of wealth can affect job creation and innovation. A loss of tax revenues can also affect state coffers, while large capital outflows may even weaken the local currency.

India is expected to lose about 3,500 millionaires this year, the Henley Private Migration Report forecasted. The estimates are based on individuals who reside in their new country for over six months and excluded those who acquire residency rights but don’t relocate. Although India is among the top countries for millionaire emigration, the number of projected departures has declined in absolute terms over the past two years, data from Henley shows.

This is thanks in large part to more people staying put to accumulate wealth and capture the country’s exponential growth, Neil Bahal, founder of investment firm Negen Capital, told me.

“India is facing strong consumption from its large population, so many millionaires want exposure to that. It’s only those who are in their retirement phase or looking to expand their businesses overseas who are moving abroad,” he noted.

Bahal is also confident that India will see an increase in the return of its wealthy in the coming years, given the country’s exponential growth. As it stands, many remain bullish on India and allocate around 60% to 65% of their investments domestically, hoping to reap multi-fold returns.

Whether the emigration of wealthy Indians will slow or pick up steam is hard to predict. But what is critical for New Delhi is to make systemic shifts that make it an attractive place to live and invest in.

For instance, political analyst Sanjay Baru highlighted the urgent need to deregulate and end the so-called “regulation raj,” or the excessive bureaucratic control over businesses.”

The bureaucracy in India remains a challenge,” Baru, who was a former spokesperson to the late Prime Minister Manmohan Singh, told CNBC’s Inside India, adding that the country also needs to look at facilitating the ease of doing business.

On a social level, Sunaina Kumar, a senior fellow at the think tank Observer Research Foundation, suggests that the government continue to invest in urban planning and build better infrastructure to reduce the “gridlock” in major cities. This would make them more livable and attractive to settle down in, she said.

Kumar also suggested that the government explore ways to intentionally engage with the wealthy who remain in India, as well as those who have emigrated.

This could be achieved by creating pathways to offer monetary contributions to philanthropic and social impact programs. Another option is for business owners to create jobs for Indians in entities both locally and abroad, Kumar said.

While these improvements may help address some of the systemic issues in India, they will take time to execute. If successful, India may eventually become another wealth hub like the UAE or Switzerland — one that keeps its wealthy individuals or spurs the return of those like KM.

“Wealth-friendly policies and better living standards will move the needle for India. There is no way I will want to stay away if those are fixed – after all, this is the place that has and will continue to generate returns on my wealth,” KM said.

Arun Kumar, previously a professor of economics at Jawaharlal Nehru University, said that the government’s unemployment data understates the true scale of joblessness and masks structural distress in the economy.

BNP Paribas analyst Santanu Chakrabarti revealed his top picks for Indian banks, adding that he expects banking margins to hit their lowest point in the first half of FY26, paving the way for a future recovery.

JSW Steel’s Joint Managing Director & CEO Jayant Acharya said he remains “hopeful” that the Indian government will take proactive measures to safeguard the country’s domestic steel industry from potential dumping by China.

Need to know

India’s growth forecast lowered. The Asian Development Bank cut its estimate of the country’s economic expansion for FY26 — which runs from April 1, 2025, to March 31, 2026 — to 6.5% from the 6.7% expected in April.

Jane Street is allowed to resume trading. The Securities and Exchange Board of India granted permission to the firm on Monday. The regulator’s recent action has raised questions about the line between arbitrage and market manipulation.

India’s passport strength jumps in ranking. According to the Henley Passport Index, which measures the number of destinations holders can visit without a prior visa, the South Asian country’s passport climbed to the 77th place from the 85th spot in the past six months.

— Yeo Boon Ping

In the markets

Indian markets were trading in negative territory on Thursday.

The benchmark Nifty 50 was down 0.62% while the BSE Sensex index had declined 0.7% as of 1:45 p.m. Indian Standard Time (4:15 a.m. ET).

The benchmark 10-year Indian government bond yield had ticked up to trade at 6.324%.

– Amala Balakrishner

Coming up

July 25: Bank loan and deposit growth data for the week ending July 11

July 28: Industrial output in June

July 30: Coworking space operator Indiqube Spaces IPO, electronics refurbishing company GNG Electronics IPO

July 31: Hotel operator Brigade Hotel Ventures IPO, Indian government fiscal deficit in June