 "Billionaires wealth, millionaires, HNI migration")
With the external environment for trade, investment and security rapidly deteriorating since the advent of Donald Trump and two endless wars, India has its work cut out to drive growth and jobs. Exports are not going to shine anytime soon, and defence and security requirements will demand greater investments at home, driven hopefully by domestic sources of capital.
From the escalating nature of Mr Trump’s actions against India, and his ever-widening set of demands, starting with trade concessions (mostly conceded) and then going on to levying extortionate tariffs for our purchases of Russian oil, including 100 per cent on non-generic pharma products and even films made outside the United States (not to speak of the $100,000 levy on new H-1B visas), one conclusion is inescapable: This goes far beyond one man’s whimsicality. Somewhere, the US Deep State has quietly joined the action.
It is now clear that the US sees India as a future threat and would not like to aid its rise, which would apply to China as well. Both the reigning superpower and its challenger are now going to try and slow us down. India’s rise will have to be driven by different global alliances, and, more importantly, by our own internal strengths.
We need large amounts of patient capital coming into technology (artificial intelligence, et al), defence, infrastructure, manufacturing, and even basic areas like quality education and affordable healthcare. While domestic investment may pick up if the economy rebounds after a fiscal consumption boost, we cannot expect venture capital and private equity alone to pick up the slack. True patient capital can only come from government and domestic investors with deep pockets.
Allocations for production-linked incentives (PLI) and other subsidies for building deep tech and artificial intelligence capabilities will add to fiscal burdens, not to mention the massive investments needed in shipbuilding, fighter aircraft, and warship design and production that the security situation warrants. Additionally, India needs its own tech products and platforms, ranging from basics like email, maps, and social media to advanced tools. All this also requires massive capabilities in cyber security.
Many will wonder why some of this investment is not coming from India’s billionaires, whose collective wealth now exceeds $1 trillion, according to the latest Hurun Global Rich List 2025. India has 284 billionaires, but it is far from clear that most of their wealth is being invested in long-gestation areas that India needs. Worse, India is haemorrhaging high-net-worth individuals (HNIs). The latest Henley Private Wealth Migration Report says 3,500 of them will leave India in 2025. The good news is that this represents a falling trend compared to 2023 and 2024, when the figures were 5,100 and 4,300. Whether this is due to growing anti-immigrant sentiment in the West or a new-found love for the mother country is anybody’s guess.
When you put India’s huge need for patient capital, and the massive wealth now locked up in the large shareholdings of India Inc’s big promoters or the relatively wealthy HNI talent now voting with their feet, three questions jump out at you: One, why aren’t promoters putting more of their own personal wealth (as opposed to corporate free cash flows) to good use for the country? Two, what is the continuing attraction of foreign shores for the HNIs who continue to leave in droves? Is there a push effect, like poor ease of living conditions, for those who desire first-world lifestyles? And three, why aren’t even cash-rich listed software services companies partially reducing their investor payouts and investing for the long term?
Our billionaires have enough paper wealth to not just leave a lot of money for their inheritors, but also to invest billions in long-term avenues that may be risky, but will generate even more wealth if they succeed. We don’t have all the answers, but clearly the government needs to find out what it can do to reverse this reality.
First, it does not make sense for billionaires to bottle up so much wealth in personal shareholdings that cannot be used for investment. Management control is important, but surely holding idle paper wealth is hardly the way to go. Mukesh Ambani owns more than 49 per cent in Reliance Industries, whose value (ie, his part) would work out to more than ₹9 trillion at current market prices. How would using even 10–20 per cent of this wealth for investment in deep tech or long-gestation projects affect his control of the company? If needed, the government can provide a backstop by guaranteeing institutional support for his stewardship as long as the company meets some operational benchmarks. What applies to Ambani applies to Gautam Adani or the Tatas or Birlas or the big infotech companies, which are anyway rolling in cash.
As for bringing back the HNIs who are fleeing India, my hunch is that they don’t have a problem investing in India, but living here has its lifestyle costs, what with poor urban governance, and daily frictions in dealing with government authorities and the regulators.
When the upper-middle classes seem to have found a way out of dealing with poor governance by retreating into gated communities, why does this not work for our HNIs? I suspect that it is the daily frictions (and poor quality of basic urban infrastructure) that drive them away, especially if they have to run a business, where extortion, demands for bribes for ordinary requests, and the heavy-handedness of the tax and police authorities make life painful.
Two possible ways out lie in giving them the best of both worlds: One is a limited period offer of dual citizenship, where they can decide whether or not to choose India for permanent settlement. And two, offering not just gated communities but also state-level concierge services where their business and personal interfaces with the government and regulatory authorities are managed through officially appointed agents.
If your child needs a birth certificate, this concierge will do the job for you. If your taxman is troubling you, an agent will deal with it. If your vehicle is involved in an accident, you can let him deal with the police and insurance companies, with the cost you pay being limited to penalties payable for your mistakes. There need not be daily harassment of people over these issues.
Getting our billionaires to invest in India, and our millionaires to return to boost growth should be high on the government’s priority to-do list. For starters, the Prime Minister should invite India Inc for a tea meeting to discuss these issues. Something good can come from it. We must pull out all the stops to make Indian wealth work for India.
The author is a senior journalist
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
