The Indian Diaspora’s Economic Impact: A Closer Look at the Numbers

Shubhangi Sharma is gearing up to host a Holi party later this month at her family home in an affluent area of Berlin. To commemorate the popular Hindu festival of colors, which falls on March 25th, the 34-year-old plans to spend approximately €200 (£171; $218) covering the expenses of Indian cuisine and sweets for her guests. She’ll purchase the expensive Holi paint online and don traditional clothing bought during a previous visit to her hometown, Delhi.

As a microbiologist, Dr. Sharma, along with her husband who works in the tech industry, enjoys economic freedom to indulge in traditional festivals like Holi. Living in a dual-income household with one young daughter and another child on the way, the couple prioritizes buying organic foods, taking holidays every three months, and investing in expensive flights for their annual trips to India.

“We moved our investments from India to Germany, so now all our savings are here, and I enjoy diversifying our investments in various stock profiles and exchange-traded funds (ETFs),” says Sharma. “We’re also in the process of purchasing a house, which should be finalized by the end of the year. It will require a significant portion of our savings, but it’s an investment in our future. Overall, moving to Germany has provided me with economic stability and freedom.”

Dr. Sharma is part of a growing cohort of Indians who have migrated to Germany in recent years, facilitated by more accommodating visa regulations for highly skilled workers. Many well-educated and English-speaking Indians are finding employment in fields such as science, technology, engineering, and mathematics (STEM), which often offer lucrative salaries. With a median monthly wage of €4,974 (£4,253; $5,416) for full-time employees, Indians now rank as the top immigrant earners in Europe’s largest economy.

The increasing Indian diaspora in Germany mirrors a broader trend among the largest diaspora group in history. Around 18 million Indians now reside overseas, spanning regions like North America, Europe, the Middle East, and Asia. Economists note that the economic impact of Indians extends beyond their native borders, leaving a significant mark on the global economy.

Indians living abroad engage in various forms of spending, saving, and investment, both within India and internationally. Non-resident Indian (NRI) bank accounts held in India received $7.99 billion (£6.27 billion) between April 2022 and March 2023, more than double the amount from the previous fiscal year. Remittance payments back to India reached a record $125 billion (£98.2 billion) in 2023, indicating a substantial economic influence.

The diaspora’s economic activities include investments in housing, education, stocks, mutual funds, and cryptocurrency. Additionally, NRIs are increasingly contributing to industries and sectors both in India and abroad, such as the IT industry and pharmaceuticals.

In the United States, Indians rank as the highest-earning ethnic minority group, with significant economic influence. They invest heavily in real estate, both domestically and globally, and make strategic savings and investment choices to retain and grow their capital. Sharma’s experience exemplifies the prudent financial management and investment strategies prevalent among the Indian diaspora, contributing to their economic impact worldwide.