This Article is From Nov 16, 2013

The reverse brain drain: why NRIs are returning to India

The reverse brain drain: why NRIs are returning to India

I am a citizen of three countries, have lived in four countries and eight homes, and can speak four languages semi fluently. I was born in India, spent five years in one country, 12 years in Canada and the USA, and finally made the move to India in 2008, where I have lived the large part over the past five years and can firmly call "home".

An identity crisis? You can say that again.

This week, I am in the United States visiting my parents, who ironically, left India 30 years ago and went West, seeking greener pastures and possibly a better education for their children. Yesterday, as I was dropping off some dry cleaning clothes, the Chinese-American lady at the counter asked me, point blank, in her broken English: "Why did you move to India if your parents left India?"

I did not have an answer, because explaining would have turned into a 10-minute ramble that I am not sure she would have appreciated since there were customers in line.

Like me, there are many NRIs or children of NRIs who are returning to India and claiming permanent citizenship in India. We Indians like to criticize our country, but it is only when you leave your country and experience living "abroad" that you realize the true beauty of India.

India, as evidenced by economists all over the world, is not only the world's largest democracy but a country with untapped and unlimited economic potential. As an entrepreneur, I can boldly state that doing business in India is one of the many intangible treasures that few other countries can offer a "foreigner". As much as we like to criticize the red tape and the daily frustrations doing business brings about, the truth of the matter is that India encourages entrepreneurship and has untapped potential in virtually every sector in its economy.

India has the world's third largest GDP (by purchasing power parity) and with a middle class of nearly 300 million, is a preferred location for FDIs around the world to invest in.

NRIs are returning to India in what is being called the "reverse brain drain". The initial "brain drain" occurred in the 1990s when many IT students left for the west for possibly better education and employment opportunities. However, as the dot-com bubble burst, many were forced to return to India. At that time, it might have seemed to them that this was a misfortune.

However, in the past decade, something interesting has occurred: India's economy boomed while the US and other countries have suffered through struggling economies. In the past 10 years, the Sensex has appreciated 310 per cent while the Dow Jones Industrial Average (the equivalent to the Sensex in the US) has appreciated a meager 62 per cent.

The global meltdown in 2008 definitely contributed towards many NRIs returning to India; however, due to the mass exodus of Indians leaving the West and returning to India, the urge to return is only going to grow since the returnees have started and will continue to start thousands of companies which will provide equal or better opportunities than there are in the West.

In a recent study published by the Harvard Law School, 50 per cent of NRI returnees are doing so for entrepreneurship and business start-up reasons. Some key findings of the same study:

  • 10 per cent of Indians surveyed held senior management positions in the US, but 44 per cent found jobs at that level in India
  • 61 per cent of Indians found opportunities for professional advancement better at home than in the US
  • Most also found better opportunities to start a business in India
  • 79 per cent were motivated to return home because of growing demand for their skills in India
  • Just 6 per cent of Indian students surveyed would like to stay permanently in the US
  • Most fear the US economy will lag global growth rates in the near future
  • 86 per cent felt the best days for India's economy lay ahead
  • 53 per cent of respondents hope to start businesses in India

NRIs have returned to India for other reasons as well. Leveraging the education and experiences they gained abroad, they are applying their skills and contributing towards India's economy in numerous ways, across all sectors and walks of life. Whether it be business start-ups, non-profits, high-level positions at MNCs, or purely to be in a country that they can confidently call "home", NRIs have been returning in a massive scale ever since the US recession began. Indian scientists and engineers are returning due to better career and growth prospects in India versus the West. There is more job security, as well as the intangible benefits of better family and cultural ties.

Another startling reason as to why NRIs are returning to India is because they are unable to get their spouses, parents, and relatives visas abroad. In India, NR's are welcomed warmly since it is guaranteed that they will most likely contribute towards the economy in a meaningful way.

There is also another valid reason as to why NRIs are returning to India: they are unable to start up their own ventures and businesses. Due to recent immigration rule changes, students with an F1 Visa in the US are unable to get into entrepreneurship due to laws that forbid them from working on "outside jobs". They can work as an employee (within their domain of studies) or in internships with companies in his/her field of study, but they are not allowed to be self-employed in a business venture.

An irrational fear among Westerners, mostly due to the recession, that an accelerated growth of Indians in their countries will make it more difficult to obtain jobs has also contributed towards the "reverse brain drain". Thus, NRIs are being crowded out overseas and are looking at India for better employment and economic opportunities.

Among those NRIs that are returning to India, a special mention needs to be made to scientists, who are finding that better research opportunities and passion towards doing something for their home countries is luring them back to their motherland. Around 500 scientists have come back in the last seven years - and only six have gone back.

While the vast majority of the "reverse brain drain" has happened from the U.S., Germany and Britain, scientists have also started coming from South Korea and Japan. Schemes set up by the Indian government, including the setting up of The Ramanujam Fellowship, Innovation in Science Pursuit for Inspired Research (INSPIRE) Programme and the Ramalingaswamy Fellowship, are just a handful of programs that are being pushed by India to entice NRIs to return to India.

The tide has finally passed. Two decades ago, India was worried was about the "brain drain". Skilled Indian students were leaving the country and caused India concerns that they would not return.

Little did they know that they indeed, would, return.

After all, home is home, right?

Raghu Kumar is the co-founder of RKSV, a broking company. The opinions expressed here are the personal opinions of the author. NDTV is not responsible for the accuracy, completeness, suitability or validity of any information given here. All information is provided on an as-is basis. The information, facts or opinions appearing on the blog do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.