Q.4. “The Indian Diaspora acts as a catalyst for economic growth and cultural exchange, but its potential remains largely untapped”. Explore the emerging trends and innovative approaches in leveraging the Indian diaspora for enhancing India’s economic competitiveness and global influence.
02,Oct 2024
Posted By : SPM IAS Academy
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The Indian diaspora, one of the largest in the world, with over 32 million people residing across nearly 200 countries, acts as a significant catalyst for economic growth, cultural exchange, and global influence. Historically, the diaspora has contributed through remittances, knowledge transfer, investments, and cultural diplomacy. However, despite its contributions, the full potential of the Indian diaspora remains largely untapped in areas such as fostering innovation, enhancing India’s global economic competitiveness, and bolstering its soft power on the world stage.
Emerging Trends in Leveraging the Indian Diaspora
A. Increased Economic Contributions through Remittances:
India has consistently been the largest recipient of remittances globally, with the Indian diaspora sending home over $111 billion in 2022 (World Bank). Remittances not only contribute to household incomes but also boost the Indian economy through increased consumption and investments.
Emerging Trend: The shift from remittances to investments in startups, infrastructure, and real estate in India reflects the evolving role of the diaspora. High-net-worth individuals (HNIs) within the Indian diaspora are exploring ways to invest in sectors like renewable energy, technology, and healthcare, aligning with India’s national priorities.
Example: The Pravasi Bharatiya Divas (PBD) 2023 emphasized the role of diaspora entrepreneurs in contributing to Make in India, encouraging investments in India’s manufacturing and start-up ecosystems.
B. Diaspora as a Bridge for Technology and Innovation:
The Indian diaspora, particularly in countries like the United States, United Kingdom, and Canada, occupies influential positions in technology and innovation sectors. Indian-origin professionals hold key leadership roles in global companies like Google, Microsoft, and IBM, making them key actors in the global knowledge economy.
Emerging Trend: Diaspora-led innovation networks are being established to facilitate the exchange of knowledge, technology, and capital. Programs like the IndUS Entrepreneurs (TiE) have created platforms for Indian entrepreneurs in Silicon Valley to mentor, fund, and collaborate with startups in India, helping boost the country’s innovation ecosystem.
Example: The Vibrant Gujarat Global Summit 2022 attracted a significant number of diaspora investors and innovators from sectors like AI, blockchain, and biotech, fostering technology transfer and cross-border collaborations.
C. Engaging the Youth Diaspora through Soft Power:
The second and third-generation Indian diaspora is playing a growing role in strengthening India’s soft power by promoting Indian culture, art, music, and cuisine across the globe. These younger diaspora members often act as cultural ambassadors, helping to maintain and promote India’s image abroad.
Emerging Trend: Initiatives like the Know India Programme (KIP), which engages diaspora youth with Indian heritage through cultural immersion programs, have expanded. The focus is on connecting young professionals with India’s development story, encouraging them to return or contribute through virtual platforms.
Example: In 2023, India@75, a global initiative celebrating India’s 75 years of independence, saw widespread participation from the diaspora, helping elevate India’s cultural diplomacy on the global stage.
D. Boosting India’s Diplomatic and Geopolitical Influence:
The Indian diaspora has emerged as a vital asset in shaping India’s foreign policy. Diaspora communities often play a critical role in influencing host governments to maintain favorable relations with India. The presence of a large Indian-origin population in countries like the United States and the UK has enhanced India’s geopolitical leverage.
Emerging Trend: The role of the diaspora in vaccine diplomacy during the COVID-19 pandemic was a notable example of diaspora-driven geopolitical engagement. Indian communities abroad actively supported India’s Vaccine Maitri initiative by facilitating vaccine deliveries and organizing health relief efforts in their host countries.
Example: The Indian-American community played a pivotal role in securing U.S. support during the oxygen crisis in India in 2021, mobilizing funds, and coordinating the delivery of oxygen cylinders, ventilators, and other critical medical supplies.
E. Promoting Trade and Investment through Diaspora Networks:
Indian diaspora entrepreneurs, investors, and professionals have been instrumental in fostering trade and investment relations between India and their host countries. By acting as intermediaries, they can facilitate business collaborations, enhance market access, and contribute to knowledge transfer in industries ranging from IT to agriculture.
Emerging Trend: The rise of diaspora chambers of commerce and networks like India Global Business and FICCI Overseas are helping foster bilateral trade and investment relationships. These organizations work to create trade opportunities, address regulatory barriers, and promote cross-border partnerships.
Example: The UK-India Free Trade Agreement negotiations saw active engagement from Indian-origin business leaders in the UK, who advocated for greater bilateral trade in services and technology sectors. Similarly, diaspora investments in sectors like health tech and e-commerce have been critical in strengthening economic ties.
F. Building Human Capital through Reverse Brain Drain:
While brain drain has historically been seen as a challenge for India, a reverse brain drain is emerging, as skilled professionals return to India to contribute to the country’s growth. Diaspora professionals are returning to take advantage of India’s expanding economy and to contribute to sectors like AI, finance, and healthcare.
Emerging Trend: Indian professionals working in the U.S. and Europe are increasingly attracted by India’s vibrant start-up ecosystem and its focus on digital transformation. Programs like the Global Indian Scientists and Technocrats Forum (GIST) have been established to encourage the return of Indian talent and foster innovation.
Example: During the COVID-19 pandemic, many Indian-origin professionals returned home, contributing their expertise in areas such as healthcare research, vaccine development, and digital health solutions.
Untapped Potential of the Indian Diaspora
A. Diaspora Bonds and Philanthropy:
While remittances remain high, the potential of diaspora investments through diaspora bonds remains underutilized. Diaspora bonds, which allow overseas Indians to invest in Indian infrastructure projects, could be a major source of capital for projects like smart cities, renewable energy, and transport.
Current Efforts: In 2021, the Indian government explored the idea of launching diaspora bonds to finance the country’s ambitious infrastructure pipeline, but more needs to be done to convert this idea into reality.
B. Formalizing Diaspora Contributions to Skill Development:
The diaspora’s contribution to skill development and education remains underleveraged. While several Indian-origin professionals offer mentorship informally, a formal structure to engage them in vocational training, education partnerships, and university collaborations could significantly enhance India’s human capital.
Example: The Study in India program seeks to attract students of Indian origin to study in Indian institutions, but the potential for expanding research collaborations between Indian universities and global diaspora-led institutions remains underdeveloped.
C. Diaspora Representation in Policy-Making:
Although the diaspora influences India’s global image and economic growth, its potential to participate in India’s policy-making process remains limited. Institutionalizing diaspora participation in economic and foreign policy could help tap into their global insights and networks more effectively.
Current Developments: The Ministry of External Affairs (MEA) has made efforts through the Diaspora Engagement Division and PBD conferences to strengthen ties, but creating platforms for continuous, structured engagement with the diaspora in policy formulation could add value.
The Indian diaspora has been an essential driver of economic growth, cultural exchange, and diplomatic influence. Emerging trends such as increased diaspora investment in Indian startups, the use of soft power to enhance cultural ties, and diaspora-led innovation networks show immense potential in strengthening India’s global competitiveness. However, challenges remain in fully leveraging the diaspora’s potential in areas like formalized contributions to policy-making, diaspora bonds, and structured skills development initiatives. By addressing these gaps, India can further enhance its economic growth and global influence, creating a more dynamic and connected Indian diaspora
