Why India’s rich are leaving

Hello, this is Amala Balakrishner, writing from Singapore. This week, I look at migration trends among India’s wealthy and uncover what is pushing them out, and keeping them rooted in India.

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The big story

Thirty-seven-year-old Indian national KM is three months away from calling Dubai his second home.

KM — who recently amassed nearly 100 million Indian rupees ($1.16 million) in assets and crossed the high-net-worth threshold — is relocating from India’s financial capital, Mumbai, to enjoy lower taxes and a better lifestyle.

The start-up founder, who only wished to be identified by his initials due to privacy concerns, is among a sizable number of wealthy Indians looking to relocate from the South Asian powerhouse.

While there is no fixed definition of who qualifies as “rich,” a widely accepted threshold for individuals in the high-net-worth bracket is 50 to 250 million Indian rupees, while those whose wealth exceeds 250 million Indian rupees are considered ultra-high-net-worth. Affluent individuals are those with a net worth between 10 million and 50 million Indian rupees.

India is home to 85,698 individuals with assets exceeding $10 million, according to a recent report from Knight Frank. That accounts for 3.7% of the global population with that net worth, more than the U.K.’s 2.4%, but less than China’s 20.1%.

With India’s booming economy poised to overtake Japan to become the world’s fourth largest, and a time of strong market returns, I was puzzled by KM’s decision to relocate.

KM told me that it was an “instinctive decision.”

“India’s economy is booming and the large consumer pool is beneficial for my company. So, I will keep it as my business headquarters, but I feel Dubai is a better place to live in,” he said.

He previously considered relocating to either Singapore, Portugal or Spain, but settled on Dubai because of its “tax-free structures, good education system, global diaspora and proximity to Mumbai.”

A recent survey by wealth management firm Kotak Private, conducted in association with consultancy EY, revealed that one in five of the 150 ultra-high-net-worth individuals polled plan to emigrate from India while retaining their Indian citizenship.

Such a phenomenon comes as wealthy Indians are considering other residencies for strategic purposes, rather than a permanent relocation, Himanshu Kohli, co-founder of multi-family office Client Associates, told me.

“Their decisions are typically driven by long-term generational thinking rather than dissatisfaction towards India,” he said.

“This isn’t about abandoning India — it’s about expanding one’s footprint and ensuring families have global options in an increasingly interconnected world,” Kohli noted, adding that many remain invested in India through start-ups and real estate.

Besides the United Arab Emirates, several countries such as Singapore, Portugal, the U.K. and the U.S. have rolled out attractive initiatives to attract the wealthy.

These include significantly lower tax rates, which are more favorable than India’s. For instance, the UAE has zero taxes on personal income, capital gains and inheritance.

By contrast, India employs a progressive income tax structure, where individuals earning around 1.2 million Indian rupees are slapped with a 15% tax, which increases with their income bracket. Meanwhile, the country has a 12.5% tax on most long-term capital gains.

India’s higher tax structure compared to other countries has led to a perception that the wealthy are emigrating to avoid taxes. That, however, “is not the whole story,” Dhruba Jyoti Sengupta, CEO of Wrise Wealth Management Middle East, tells me.

“India, still views wealth within domestic constraints,” he said. By this, he means that India’s policies focus on domestic wealth management rather than building strategies with global exposure.

And so, Sengupta argues that India’s wealthy “are not fleeing taxes. They’re buying freedom, mobility, peace of mind and the ability to plan for the future. As the next generation is coming up, they want options.”

He also flagged regulatory challenges in wealth and legacy…