Moving beyond India’s brain drain
Moving beyond India’s brain drain

The India vs. China has been raging for years, which one will develop faster and which model is more successful? Over the past year China’s growth has slowed to around eight percent, instead of the average ten percent it achieved in recent years. Its 2009 stimulus resulted in overcapacity and did not stimulate productive capacity (Mourdoukoutas, 2013). On the other hand, India’s economy grew at an average of eight percent until the worldwide economic downturn and recently its growth rate has only been about five to six percent (King, 2013). Unlike China, India is underdeveloped in terms of infrastructure. Despite different challenges ahead, one problem that both countries face is the brain drain.

The brain drain is the exodus of educated professionals from one country (often a developing country) to more developed ones. Pull factors such as better economic opportunities, more academic freedom, and high-class research facilities are at play as well as poor infrastructure, corruption, and other negative factors in the home country. This analysis will highlight India’s historic migration patterns and examine the role of bureaucracy and education policy in influencing India’s brain drain.

History: Indian Brain Drain in Perspective

Migration of skilled (and unskilled) workers from India has been taking place since the 19th century. In the mid-1800’s, following the abolition of slavery, Indian peasants were shipped by the British to its colonies to work in plantations. By 1916, more than 1.5 million Indians were shipped to British colonies and, by 1937, an additional six million traveled to Sri Lanka, Malaya, and Burma to work in plantations (Naujoks, 2009).

The next wave of migration took place after Indian independence and the partition of Pakistan. An estimated 12-18 million Indians crossed borders, with Hindus moving to India and Muslims moving to Pakistan. Otherwise, after independence, the main destination was the United Kingdom. Flows to the UK peaked in 1968, when restrictions were finally set in place. The numbers decreased from the peak of 23,000 per year to 5000 per year (Naujoks, 2009).

Little India in California

Indian migration to North America (U.S. and Canada) reached significant numbers in the 1960s when country quotas were abolished for high skilled immigrants. By 2007, more than 2.5 million Indians (including foreign born individuals of Indian ethnicity) lived in the U.S. Since the 1990s, Australia and New Zealand also became important destination countries for skilled Indian immigrants, as both countries passed laws that made it easy for students to stay in the country after graduation. By 2007, more than 153,000 Indian students pursued degrees abroad and half of these students went to the U.S. Only China sends more students (Naujoks, 2009).

Skilled migrants are not the only ones traveling abroad. Unskilled workers are still leaving India as well. The Gulf Countries are one of the most popular destinations for this group. The number of Indians traveling to Gulf increased from 160,000 in 1990 to 777,000 in 2007 (Naujoks, 2009). The current Indian diaspora population is estimated at 25 million people (Made outside India, 2013)

Why are Indians leaving India?

Historically, Indians left because of better economic opportunity abroad. This is probably still one of the main reasons why Indians leave today. There are many factors though that contributes to the Indian exodus. Understanding these factors will help policymakers improve conditions to encourage Indians to return or to stay in the first place.

Red Tape and Bureaucracy

Dubai, Malaysia and Singapore all serve as hubs for ancillary Indian businesses that do not want to deal with the vast Indian bureaucracy. For examples, most flights to India travel through these three countries because there are lower custom duties on spare parts for planes that need to be serviced. Dubai also has better ports, air links and immigrations rules. Many Indian financial firms are moving to Dubai, particularly because of the high interest rates at home. At least half of all rupee trading takes place offshore (Made outside India, 2013).

Little India in Singapore

Singapore is another investment banking hub for Indian firms. Singapore is also home to many tech companies because of cheaper bandwidth and the ease in acquiring hardware. Additionally, Singapore is home to legal services for companies that do not want to deal with the hassles of the Indian court system, which have major backlogs (Made outside India, 2013).

Other countries, such as Sri Lanka, serve as intermediaries for companies shipping goods to India because shipping companies do not want to deal with Indian customs. Furthermore, Indian ports cannot accommodate big shipments. Another nearby country, Mauritius, serves as the main conduit for foreign investment in India. Investors pay the same rate as local Mauritian firms (which is close to zero) and not the Indian rate. As a result, 30-40 percent of the stock of foreign capital bound for India is located on Mauritius (Made outside India, 2013).

Clearly, India needs to reform its banking sector, improve its infrastructure, and offer a better tax incentives if it wants to keep these businesses at home. To tackle these challenges, India will have to address long-standing problems, such as corruption and political deadlock, which underlie these problems. Further exacerbating the infrastructure challenge is the lack of planning and tracking associated with the increased urbanization taking place in India. Local governments do not have the capacity to collect data and the federal government has not made it a priority (Lal, 2013). Addressing political deadlock is crucial to passing laws and creating policies that will address these vast problems.

Academic and Research Institutions

On the academic front, the Indian government is taking steps to improve the research climate. India’s new science policy aims that by 2020, India will be among the top five nations worldwide for scientific achievements. To achieve this lofty goal, India must increase the number of students pursuing doctorates at home. Improving research, lab facilities, funding, conference opportunities, and travel opportunities may encourage doctoral students to stay in India. Furthermore, India has to improve the quality of the teaching staff at its universities as well. There are large numbers of vacancies at the elite Indian Institutes of Technology as well as at other higher education institutions. Government funding for research needs to increase if qualified faculty are going to teach and research at Indian universities (Mishra, 2013).

India also has to improve its educational system at the undergraduate level as well. The cut-off for admission is nearly 100 percent at the top Indian universities. This leads many youth to explore costly higher education opportunities abroad. There has been a 256 percent increase over the past ten years in the number of Indian students going abroad for higher education (Brain drain: Boon for developed countries, but bane for India, 2013).

Indian efforts to improve its higher educational system are starting to bear fruit. About 500 scientists have returned to India in the past six to seven years. The main reason cited for their return was a love for India, tough competition abroad, and better research opportunities in India (Reverse Brain Drain? Better Research Facilities See Indian Scientists Return, 2013). Only time will tell if this is the start of a larger trend.


Given India’s history of migration, it will be a major challenge to keep India’s most talented at home. The country will have to tackle some of its long-standing infrastructure and bureaucratic issues if it wants less migration. With a diaspora of 25 million, Indians can easily travel all over the world and find communities that meet their cultural and religious needs, while taking advantage of hassle-free environments to run businesses and undertake research. This makes the government’s task even harder.

The efforts to transform India’s higher education system are sorely needed and will eventually strengthen the country as more highly educated citizens conduct research and start their own businesses. Investment in human capital is just as important as the investment in physical infrastructure. Both need to happen simultaneously for India to stem the time of the brain drain. With a democratic government, change is possible. Political will is needed to move beyond the current gridlock. If this is able to occur, the India will be a model country and force to be reckoned with on the world stage.

Works Cited

Brain drain: Boon for developed countries, but bane for India (2013, July 3). Retrieved from:

King, M. (2013, July 31). Analyst sees dimming of India’s economic growth prospects. The Journal of Commerce. Retrieved from:

Lal, N. (2013, August 7). India’s migration to the cities. Asia Sentinel. Retrieved from:

Made outside India (2013, August 10). The Economist. Retrieved from:

Mishra, A. (2013, May 21). India takes steps to prevent ‘Brain Drain’.  The Chronicle of Higher Education. Retrieved from:

Mourdoukoutas, P. (2013, August 19). What can reignite China’s economic growth? a dose of creative destruction. Forbes. Retrieved from:

Naujoks, D. (October 2009). Emigration, immigration, and Diaspora relations in India. Retrieved from:

Reverse brain drain? Better research facilities see Indian scientists return (2013, August 5). Retrieved from:

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