IAS Resources

IAS Score

Target PT 2018 Classes: Complete Revision through MCQs, Program will start from 25th Feb, 2018.
Click here for Course details & Online admission.

Importance of Diaspora to India

The Indian Diaspora is a generic term to describe the people who migrated from territories that are currently within the borders of the Republic of India. It also refers to their descendants. The Diaspora is currently estimated to number over twenty million, composed of "NRIs" (Indian citizens not residing in India) and "PIOs" (Persons of Indian Origin who have acquired the citizenship of some other country). The Diaspora covers practically every part of the world. It numbers more than a million each in eleven countries, while as many as twenty-two countries have concentrations of at least a hundred thousand ethnic Indians.

There are three categories of overseas Indians.

• NRI’s: Indian citizens staying abroad for indefinite period for whatever purpose (Majority in Gulf).

• PIO’s: Overseas Indian who have become citizen of the countries of their settlement.

• SPIO: Stateless Person of Indian Origin have no documents to substantiate their Indian Origin (Majority in Myanmar and Sri Lanka).

In the age of economy slowdown, India is passing through a bad phase and its monetary condition is severely affected. Inflation rate is high and people are unable to manage their daily life. In this context Indian government has great expectations from millions of Non-resident Indians to resolve the crisis through making investments in India. More than 25% of India’s population of 1.03 Billion falls under the ‘extreme poverty’ group. Another 40% of the population falls under the category of ‘poverty’ leaving around 30% as the ‘urban middle class’. This ‘urban middle class’ of around 300 million people have just started their consumer goods spending spree. Though India has enough natural resource but has not enough capital to exploit them and progress the economy. For this, India depends on external investments.

While NRIs generate earnings is estimated to be $250 billion and is one third of the GDP of India. Thus, NRIs and POIs can contribute a lot to Indian economy and enhance its fiscal growth.

The impressive Diaspora has played an important role in promoting India’s interest abroad and act as its unnamed ambassadors. This is more so in the fields of culture, education, economic development and health and arts. Indians are leaders in areas like information technology and largely contribute in this. Above all these PIOs can help India by investing in Indian industry and infrastructure to encourage its economic growth.

Even though NRI’s contribution is not visible but they are helping their country through varied activities in India. Many reports reveal that NRI’s are major source of Direct Foreign Investment, market development (outsourcing), technology transfer, charity, tourism, political contributions and more substantial flows of knowledge, in India.

The NRIs have came forward with several non-governmental organizations in India helping in array of developmental, educational and social projects.  It has been observed that large number of NRIs is actively taking part in several welfare programs in India. They have registered many NGOs to encourage education, health care and developmental activities such as water management, rural development and self-help programs etc. They are also assisting in social and environmental problems in India.

Telecom and IT services are the biggest services exports from India, and in that period those amounted to $49.6 billion so at $48.5 billion, remittances are almost as big as IT exports.

The role of science in the Diaspora needs to be further highlighted. The Diaspora’s scientific achievements, in virtually every field, have not just enhanced India’s image in the world. They have also led to a direct and mutually-reinforcing synergy between Indian science abroad and at home. This is most visible of course in India’s IT sector and its symbiotic relationship with the Silicon Valley in California. Besides, the fear of a “brain drain” is misguided. A “brain” sitting in an uncongenial environment can drain away faster than if it goes to a stimulating interference-free environment abroad.

Indian Diaspora has also emerged as an important factor in India’s foreign policy, economic development and knowledge transfer.  With US $ 56 billion of remittances, overseas Indians play an important role in India’s foreign exchange management.  The success of Indians in the developed world, particularly in knowledge industries and professions like medicine and academia have transformed India’s image.  Domestic reaction to the plight of Tamils in Sri Lanka, highlight the implication of Diaspora factor in our external relations.  The LTTE and separatists movement in Punjab illustrate the impact of Diaspora in national security.  Recent row over the custody of two Indian children in Norway is another example of Diaspora factor in our external relations.

What are the issues with Diaspora and their demands?

Dual citizenship is one of the important demands of the Diaspora. Presently, once they opt to take foreign citizenship, they forfeit their Indian citizenship. The Indian Diaspora strongly feels that such a step would result in their playing bigger role by way of investment and other things. The Government has recently cleared the proposal for new law to expand scope for dual citizenship.

There is need for better interaction and requires deeper cultural relations. The Indian Council for Cultural Relations can play a big role in this regard.

On the economic side India could attract more foreign direct investment if procedural delays are cut down. The climate has to be created for investor’s confidence. The expertise in management, financial, corporate, trade and banking sectors should be tapped for economic rejuvenation of India. The second generation reforms should be speeded up. 


To sum up, the nature of engagement with Diaspora has changed according to the needs of the time.  Because of extraordinary diversity and geographical spread the policy of engagement has to be flexible and tailor made to suit each segment of Diaspora.  The approach towards the workers in the Gulf is primarily welfare oriented and remittance centric.  Engagement with the Diaspora in the developed world has to be multifaceted and aimed at making India a knowledge power.  Their strengths have to be leveraged for political lobbying, image projection and economic development of India.  

To conclude, the communication and transportation revolution and the global reach of media are creating a major change in the nature of relationship between the Diasporas and their country of origin.  India must follow a robust and flexible policy in order to leverage the strengths of Diaspora and minimize the possibilities of any negative fallout.  Diaspora can play an important role in India’s quest to be a knowledge power and a developed country. 


More In This Section

Quick Contact