How NRIs help India while desis crib about them

MADHU GOPINATH RAO writes from New York City: If you write about India or Indian matters, and happen to be based outside India, it comes as no surprise to see a couple of “Why don’t you come back to India first…” or a “What do you know of the rural reality?” taunts pop up in the comments. Many of these come from the web 2.0 crowd that has embraced the IT boom and blogging, and are themselves an integral part of it.

We have come to accept, embrace and revere the beacons of India’s web 2.0 : the N.R. Narayana Murthys and Azim Premjis, who, as czars of Nasdaq and NYSE listed conglomerates, made their riches in dollars and pounds among a bunch of other currencies. The NRNs and Premjis are national heroes while your typical Non-Resident Indian (NRI) is a deserter who is pursuing his dreams outside the subcontinent.

Quite a few of these IT giants/heroes, rightfully praised for their entrepreneurship, have shied away from doing domestic IT business as the profits are shallow and it does not make business sense. On the other hand, a garden-variety NRI gets a jeer for the foreign association.

Why the different yardsticks?

Since the rupee-to-dollar conversion provides a 40x multiplication factor, a dollar saved is 40 rupees saved; hardly anything you did not already know. The factor is similarly attractive in some other foreign currencies as well. This has been a strong reason for Indian nationals, and companies alike, being interested in overseas markets—yours sincerely included.

I offer no other altruistic, untrue reason that intends to side-swipe this gospel truth. None is needed in my opinion, for it is not a crime to pursue your dream while being rooted deeply with the mother ship. Far from jeering, NRI baiters may have a reason to thank me and my ilk.

If you think this is another bored to death NRI spinning a tale, no, I’m not about to spin a tale, I sit on my tail thank you.


Get this:

India’s Foreign Direct Investment in 2007: $16 billion

NRI remittances: $29 billion, translating to $90 billion

India’s FDI has witnessed a startling surge. As compared with $16.5 billion over the whole of the 1990s at an annual average of $2.2-3.2 billion, the FDI for 2005-06 was pegged at $5.5 billion. In 2006-07, it touched $11.19 billion and for 2007, by Oct-2007, it was at $15.7 billion and climbing. It is downright stupendous when your current year investment (2007) is as much as the whole investments in the last decade pre-millennium(1990s).

In another seemingly unrelated yet relevant news, Western Union, a global provider of cross-border money-transfer services, proudly opened its 50,000th agent location in India on January 14 this year.

According to the Reserve Bank of India, India is one of the largest receivers of foreign remittances. How much is it anyway? And shall we compare that with the FDI that we are so proud of?

Sure, how does 200% of FDI sound? There is no typo there. The remittances were in the excess of $26.9 billion for 2006-2007. Now contrast $29+ billion with India’s 2006-07 defence budget as the fourth largest military on the planet: $20 billion.

By the time you have collected your jaw from the floor to retort about the urban-rural disparity in the flow, let me tell you that Western Union’s 50,000 agent locations in India span across 5,000 cities, towns and villages. This includes more than 8,500 post offices and more than 14,000 branches of leading banks. That’s clearly not just your major metros?

And it gets even better, $30 billion is more like $90 billion!

“If the World Bank is correct, every dollar remitted contributes 3 dollars to the GDP growth—which means that NRIs are contributing almost $90 billion to the growth of India’s rural economy…”

Shekhar Kapoor, the noted film maker, who pursues as much of his dreams overseas as in India.

Per above, the NRI funds seem to disseminate better into the rural areas than many a fancied FDI. The common-man -being-left-out card doesn’t hold water either. Yes, the IT boom and the ‘going abroad’ becoming a commonplace has created an economic imbalance. But the same has also led to the vast upwardly mobile bludgeoning middle class that has a better quality of life.

Per above the myth that this boom has not helped the poor, is well, a myth at best. The McKinsey group‘s detailed study takes a realistic note of the ground realities, the above included. Excerpts:

“Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94 per cent in 1985 to 61 per cent in 2005, and we project that it will drop to 26 per cent by 2025.”

“The Indian middle class has already begun to evolve, and by 2025 it will dominate the cities. By then about three-quarters of India’s urbanites will be part of the middle class, compared with just more than one-tenth today.”


I have great respect for people who are driven enough to pursue their ambition, and go where it takes them. Likewise, I have profound respect for people who are grounded enough to seek those dreams from their home soil. The former vs the latter is more often than not a matter of circumstance with a million other influences.

To say one is in any way better or noble compared to the other is myopic and naive. In times when the world is getting flattened and global sourcing is an accepted norm, we need to get past denial and onto acceptance.

When was the last time you picked up something that did not have a foreign collaboration slapped to it?

From the Colgate that starts the mornings, to the Suzukis-Chevrolets-Volvos that ply you to software parks that cater to a largely foreign customer base, via the HP-IBM-Dell desktops running Microsoft’s Windows, to the Pepsis-Cokes to the Lay’s chips to the iPods, you are more of a global citizen today than ever before.

It is no secret that, given a sliver of chance, very many of these critics and jeerers would only be too happy to pack their suitcases and line up at the embassies.

That notwithstanding, if ‘Foreign Direct Investment’ and ‘Non Resident Indian’ investments are key to India’s growth, and NRIs, apart from re-investing in India do influence the FDI flow as well, we ought to treat them better—$90 billion is no chump change, and a similar phenomenon is not happening in China that is oft compared to India, and China has a bigger expat population.


NRIs have a very strong sense of bonding with the mother ship and this helps India.

If the remittances cannot make a believer out of you, just look at any popular site’s sitemeter. The diaspora that checks in is not all domestic traffic. Nostalgia, a sense of belonging or longing, sardarji jokes, Rakhi Sawant or Deve Gowda, all of the above that gets them there, is pure Indian. From the Bollywood movies to the temples-mosques galore, the Indian diaspora has kept in touch with the Indian culture, despite being away and in their own way.

The above is just my view point. I’m sure there are interesting, constrasting thoughts on both sides of the sea.

Let’s hear them.