India to witness a drop in net outflow of HNWIs in 2023, says Henley & Partners’ Report

India is projected to witness a net outflow of 6,500 high-net-worth individuals (HNWIs) in 2023, according to the Henley Private Wealth Migration Report 2023 which tracks wealth and investment migration trends worldwide. This places India as the second-largest country in terms of HNWI outflow globally, following China (net loss of 13,500). The current projection indicates that the anticipated HNWI flight is slightly lower than the previous year's net outflow of 7,500 millionaires.

The report, released today by Henley & Partners, exclusively features the latest forecasts of net inflows and outflows of US dollar millionaires, as projected by global wealth intelligence firm New World Wealth, which has been tracking global wealth migration trends for over a decade. The report further ranks UK (3,200) and Russia (3000 ­vs 8,500 in 2022 following its invasion of Ukraine) in 3^rd and 4^th place respectively.

Given India's capacity to generate new millionaires, the outflows are not considered particularly concerning. New World Wealth projects general wealth projections for India as very strong.  According to them, the high-net-worth individual population is projected to experience a remarkable 80% increase by 2031, positioning India as one of the world's fastest-growing wealth markets during this period. This growth will mainly be fuelled by the thriving financial services, healthcare, and technology sectors within the country. Interestingly, the firm has observed a notable trend of affluent individuals returning to India, and as the standard of living continues to improve, it anticipates a significant influx of wealthy individuals moving back to India in greater numbers.

Dominic Volek, Group Head of Private Clients at Henley & Partners, reveals significant insights into millionaire migration trends in India. “Recent and persistent turmoil has caused a shift — more investors are considering relocating their families for a range of reasons, from safety and security, to education and healthcare, to climate change resilience and even crypto-friendliness. It is important to note that nine of the Top 10 countries for forecast net HNWI inflows in 2023 host formal residence by investment programs that encourage foreign direct investment in return for the right to reside, which can also lead to citizenship in some cases. Investors see the clear value of diversifying their domicile portfolios as the ultimate hedge against both regional and global volatility, now and in the future.”

Henley & Partners received the highest number of investment migration program enquiries on record in the first quarter of 2023 — an increase of 36% compared to the previous quarter, and a remarkable 47% higher than the same period in 2022, which was itself a record-breaking year. The top two nationalities currently driving demand are Indians and Americans, with Brits and South Africans remaining in the Top 10 as they have done for the last five years. 

Sunita Singh-Dalal, Partner, Private Wealth & Family Offices at Hourani says “Prohibitive tax legislation coupled with convoluted, complex rules relating to outbound remittances that are open to misinterpretation and abuse, are but a few issues that have triggered the trend of investment migration from India. Dubai and Singapore remain preferred destinations for wealthy Indian families. The former, also known as the “5^th City of India,” is particularly attractive for its government-administered global investor “Golden Visa” programme, favorable tax environment, robust business ecosystem and safe, peaceful environment.”