Significance, Challenges and Suggestions for India’s Diaspora



  • Diasporas influence national economies in several ways, including remittances to family members in their home country, foreign direct investment, entrepreneurial endeavours, facilitation of trade and transfer of knowledge/skills. They can serve as an important economic resource, especially in developing nations.
  • Remittances Transfers (monetary or in-kind) from a migrant to his or her home country. They are perhaps the most visible economic implication of a diaspora. Most remittances are sent to low & middle-income countries.
  • Remittances can function as a sort of private form of social protection that can supplement or substitute public social protection spending. Increased remittances tend to reduce public social protection expenditure.
  • Main contribution of remittances is to households that receive them, but significant spill over benefits to wider community have been observed through increased consumption and community development projects
  • Brain gain occurs when migrants learn skills & obtain education abroad and then transfer their knowledge and skills back to their homeland, either through their networks within the country or through return migration.
  • Through knowledge transfer, sending countries can gain from skilled emigration. As skilled migrants accumulate intellectual, social, and economic capital in the host country, this can be strategically utilized by home country to mitigate brain drain effect.
  • Indian IT sector is an example of a brain gain effect. The diaspora was instrumental in bringing skills, human and social capital, and networks needed to grow the sector in India.
  • International Trade, Investment, and Entrepreneur-ship: Size of a diaspora population has a significant and positive correlation with international trade between host nation and diasporic homeland. Findings from India show that the Indian 15 diaspora has been instrumental in promoting trade linkages between India and other nations in the Asia Pacific region
  • FDI from diaspora is strongly influenced by diaspora’s affinity for their culture in the homeland.


  • Policy can often shape a diaspora; likewise, diaspora groups can have a significant effect on policy. Diasporas often mobilize networks and resources to support a certain cause in either their homeland or their host countries
  • Evolution and growth of diasporas have been congruent with increasing globalization that has been driven in significant part by policy changes.
  • Preferential trade agreements stimulate significantly increased migration and strong diaspora communities facilitating increased international trade agreements.
  • Indian diaspora today occupies top position in foreign countries for ex. KAMALA HARRIS in USA or the recent election of RISHI SUNAK as the PM of UK.
  • These are indicative of the growing economic influence of Indian Diaspora over the world and a testimony of the same in the past can be given by signing of India-USA nuclear deal.


  • Institutionalisation of the Diaspora-diplomacy in recent times is indicative of prominence of the role played by Diaspora in the foreign policy formulation and acting as an instrument of Soft-power and thus meeting the ends or limitations of the hard-power.  For ex. Senate India Caucus i.e., is a bipartisan coalition that promotes relations between USA and India.


Parliamentary Standing Committee highlighted the following Issues in India’s Diaspora Policy

  • Negative impacts: Some sections of India’s diaspora have indulged in negative campaigning and funding separatist groups in India such as Pro-Khalistan groups in Canada and Punjab.
  • Issues arising out of protectionism: Growing protectionism across the globe means that there is a negative attitude in many developed and developing countries against skilled Indian workers who are viewed as taking jobs. Ex. Denial of H1B visas in USA.
  • Human Rights abuses: Indian diaspora is often discriminated on racist and colonial mindset. For ex. Violence against Indian students in Australia.
  • Lack of dual citizenship: India’s constitution does not allow dual citizenship this forces many India’s diaspora to quit India’s citizenship despite wanting to be Indian citizens.
  • Policy for diaspora: No clear policy on diaspora is in place, despite their socioeconomic contributions to the development of the country.
  • Database on Indian diaspora: Ministry of External Affairs does not have updated data on Indian diaspora, as registration with Indian Embassies is voluntary. In the absence of such a database, welfare schemes may not be implemented properly.
  • Emigration Management Bill: Emigration Management Bill, 2022 has been under consultation and vetting for a long time. It seeks to establish an emigration framework, liberalise clearances, and strengthen welfare for overseas migrants.
  • Multiple portals for grievance redressal: Several portals such as e-Migrate, and Centralised Public Grievance Redressal and Monitoring System (CPGRAMS) are in place to resolve the grievances of Indian nationals abroad. Multiple portals may delay grievance resolution due to duplication of work. Resolution of grievances in most cases may require a connection at the local level.
  • Rehabilitation of workers: During the COVID-19 pandemic, many workers including Gulf returnees lost their jobs. As the pandemic eased, few workers have returned to their places of employment abroad. Thus, a rehabilitation scheme to ensure livelihood security for workers who lost their jobs or were unable to return to their place of employment is required.
  • Skilling of potential migrant workers: International labour market has now become demand-driven, compared to the earlier supply-driven system. With new labour markets emerging in east-Asian countries such as Japan, Korea, and Taiwan, the skilling of potential migrant workers is a challenge.
  • Students in Ukraine and China: Several Indian medical students studying in Ukraine and China were unable to resume their courses physically or complete their internships in India due to the COVID-19 outbreak.
  • NRI Marriages: Increasing cases of women being deserted in NRI marriages. Registration of Marriage of Non-Resident Indian Bill, 2019 has not been enacted yet.
  • One-Stop Centres: Ministry of External Affairs had decided to establish overseas centres to help distressed NRI women. However, it is not yet in place.
  • Challenges to Philanthropy: Despite eagerness of PIOs/OCIs to donate generously for development of India they face challenges such as FCRA, bureaucratic compliance and even hostilities frustrating their efforts to contribute to development of India.
  • Impact of domestic policies: Policies to protect rights of Indian diaspora such as e-Migrate system and Minimum Referral Wages have made it difficult and costly for India’s low skilled diaspora to migrate to reap economic opportunities and let India harness its demographic dividend.
  • Selective engagement: Exclusion of large sections of low-skilled and less wealthy diaspora from forums such as Pravasi Bharatiya Diwas etc.
  • Rising conflicts and instability due to the Shia-Sunni conflicts and radical Islamism. Regressive and medieval policies like employers seizing the travel documents upon arrival known as “Kafala” labour system are exploitative. Discriminative practices owing to a racist, colonial mindset persists even the Cultural integration becomes difficult.


  • Ministry of External Affairs should draft a clear policy document on the diaspora which would serve as a guiding principle for engagement with the community.
  • Indian Embassies should encourage the diaspora to register themselves, which would allow the Ministry to effectively implement welfare schemes.
  • Parliament should enact Emigration Management Bill, at the earliest.
  • Ministry of External Affairs should complete its consultation and enact a law for the benefit of NRI women.
  • CPGRAMS portal is the quickest way to interact with state governments or the district police, but it is not popular overseas. It recommended that the Ministry of External Affairs should publicise the portal so it can be used to resolve grievances effectively.
  • Ministry of External Affairs should draft a comprehensive rehabilitation scheme in coordination with the concerned Ministries, Departments, state governments, and stakeholders.
  • Need to improve the quality of domestic skilling and standardising curricula across the country to ensure that migrant workers can go abroad and secure employment with better wages.
  • Providing skills that match the destination country’s requirements is an important challenge, especially in the post-COVID era.
  • Ministry of External Affairs should ensure that Indian private medical institutions enrol returnee students from Ukraine by granting a one-time exemption. Indian students enrolled in medical colleges in China, should be allowed to complete the remaining part of their internship in India.
  • One-Stop centre scheme be launched without delay.
  • Government should consider setting up Special Economic Zones, exclusively for projects to be set up by NRIs/PIOs.
  • Government should consider issuing special infrastructure bonds for attracting NRI/PIO investments like the Israel Bonds.
  • Negotiating Standard Labour Export Agreements with the host countries. Monitoring and supervision of our overseas workers by our Missions. Compulsory insurance schemes cover the risks faced by our overseas workers.
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