The Diaspora Effect: Driving Bilateral Ties and Remittances to India

The Global Opportunity in Money Transfers

India’s growth story now extends far beyond its borders. From engineers in Silicon Valley to healthcare workers in Doha and policymakers in London, the global Indian diaspora is redefining the nation’s international presence. This dynamic community of more than 35 million people is not just shaping economies abroad—it is reshaping India’s own. Through record-breaking remittances, foreign investments, and global leadership roles, the diaspora has become a major pillar of India’s soft power and bilateral diplomacy.

The Expanding Reach of India’s Global Diaspora

According to the Ministry of External Affairs (2024), India has the world’s largest diaspora—over 35 million people of Indian origin living in 200 countries. Major hubs include:

• United States – 5.41 million
• United Arab Emirates – 3.57 million
• Malaysia – 2.91 million
• Canada – 2.88 million
• Saudi Arabia – 2.46 million
• Myanmar – 2 million
• United Kingdom – 1.8 million

Comprising both Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), this network is a strategic economic asset and an informal bridge between India and the world.

Remittances: The Lifeline of the Indian Economy

India has led global remittance inflows for over 25 years. The Reserve Bank of India (RBI) reported that remittances reached a record US$ 136 billion (₹ 11.6 lakh crore) in FY 2025, up 14% year-on-year from FY 2024. These flows now account for 10% of India’s current account inflows, covering nearly half of the merchandise trade deficit. Beyond macroeconomic impact, they sustain millions of families and help stabilize the rupee.

Country-wise Share of Remittances (FY 2024)
The trend is shifting from Gulf-dominated flows to high-income, technology-driven economies like the US, UK, and Canada. This shift indicates a more diversified and resilient remittance base aligned with India’s digital and knowledge-based growth model.

Investment Channels Beyond Traditional Remittance

• Start-ups: Diaspora investors are fuelling India’s innovation economy. Notable figures such as Sundar Pichai, CEO of Alphabet Inc., recently invested ₹ 309 crore (US$ 36 million) in a Bengaluru deep-space start-up—illustrating confidence in India’s technology ecosystem.
• Real Estate: NRI investment in Indian real estate has risen from 12% in 2019 to nearly 19% in 2024 and is projected to touch 20% in 2025. The sector remains a preferred long-term asset class for diaspora investors.
• Equities and Debt: Through schemes like the Portfolio Investment Scheme (PIS), NRIs can trade Indian shares and debentures. In May 2025 alone, Foreign Portfolio Investors (FPIs) infused ₹ 19,860 crore (US$ 2.31 billion) into Indian markets.
• Philanthropy: Diaspora philanthropy is expanding rapidly. India Giving Day 2025 raised ₹ 76 crore (US$ 8.86 million), up 60% from the previous year. Initiatives like the India Development Foundation of Overseas Indians (IDF-OI) have made giving more transparent and accessible.

The Diaspora as Economic and Cultural Ambassadors

The Indian diaspora has become a central pillar of India’s soft-power diplomacy. Through festivals, cultural institutions, and global leadership, they project a positive image of India worldwide.

• Cultural Diplomacy: Organisations such as the Indian Council for Cultural Relations (ICCR) partner with diaspora groups to host yoga festivals, art exhibitions, and tourism campaigns that promote India’s heritage. Indian cuisine, cinema, and arts have become everyday ambassadors of culture and goodwill.
• Political and Corporate Leadership: Global leaders of Indian origin—such as Rishi Sunak (UK), Kamala Harris (US), Sundar Pichai (Alphabet), Satya Nadella (Microsoft), Indra Nooyi (PepsiCo), Arvind Krishna (IBM), and Shantanu Narayen (Adobe)—play pivotal roles in shaping global trade, innovation, and diplomacy.

Strengthening India’s Global Economic Ties

According to the RBI, remittances contribute 2–3% of India’s GDP annually, helping finance imports and stabilize the currency. But the impact extends far beyond numbers:

• Trade Expansion: Diaspora networks create new bilateral trade corridors.
• Technology Transfer: Skilled returnees bring expertise that fuels innovation and research partnerships.
• Investment Diplomacy: Diaspora capital supports India’s global partnerships in energy, fintech, and technology.

This continuous exchange strengthens India’s position as a trusted global partner and emerging economic powerhouse.

Looking Ahead: The Diaspora and “Viksit Bharat 2047”

As India advances toward its vision of becoming a developed nation by 2047, the diaspora will remain a key catalyst. Their remittances, investments, and thought leadership will continue to drive India’s growth across economic, social, and diplomatic spheres. The diaspora effect is not just about the flow of money—it’s about the flow of ideas, innovation, and goodwill that connect India to every part of the world.