India’s millionaire migration signals deeper structural concerns

India’s millionaire outflow stems from rigid industries, weak innovation, and limited competition—pushing wealth abroad to risk-friendly ecosystems

India has witnessed a steady outflow of millionaires over the past several years, a trend often attributed to pollution, lifestyle upgrades, or high taxation. However, recent insights suggest that the reasons are far more systemic, rooted in the structure of Indian industry and the limited opportunities for innovation.

A Gradual but Consistent Exit

The departure of wealthy individuals is not sudden but has unfolded gradually. Data from Henley & Partners highlights the continuity of this trend: approximately 5,100 millionaires left India in 2023, 4,300 in 2024, and nearly 3,500 are projected to exit in 2025. While the numbers vary annually, the direction remains consistent. This indicates not panic-driven decisions but long-term repositioning by wealth holders who increasingly view India as less attractive for deploying capital or building future-facing businesses.

Concentration of Power in Industry

A key factor driving this migration is the concentration of power among India’s largest business families and groups. Many sectors have remained under the control of the same players for decades, leaving limited space for new entrants or disruptive ideas. Such dominance stabilizes markets but also slows innovation. In this environment, wealth is incentivized to preserve itself rather than challenge the status quo, reducing risk-taking and pushing capital outward to ecosystems that reward experimentation.

Defensive Wealth Strategies Abroad

As opportunities for innovation appear blocked, wealthy individuals are shifting their investment centres and family offices abroad, particularly to hubs such as Dubai. This move is less about luxury living and more about operating in systems that offer faster regulatory approvals, clearer rules, reduced bureaucratic friction, and predictable enforcement. Once wealth turns defensive instead of creative, migration becomes a rational economic decision.

Survey Data Confirms Structural Drivers

A joint survey by Kotak Private Banking and EY reinforces this perspective. More than one in five ultra-high-net-worth individuals in India—those with assets above ₹25 crore—are either planning to migrate or have already done so. While respondents cited quality of life, healthcare, education, and taxation as factors, these were seen as symptoms of deeper frustrations with weak policy support, limited institutional trust, and challenges in scaling innovation within traditional frameworks.

Taxes and Pollution Not the Core Issue

India’s corporate tax rate remains globally competitive, and personal income tax levels are comparable to many developed economies. Pollution and infrastructure stress are longstanding issues. What has changed is the perceived reward for risk-taking. When innovation struggles to gain ground, remaining invested in the domestic system feels less attractive, regardless of tax rates.

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Weak Investment in Innovation

Large companies often spend heavily on corporate social responsibility and financial structuring but lag in serious investment in research, advanced manufacturing, and frontier technology. Without sustained innovation spending, industries risk stagnation. For wealthy investors, this signals limited opportunity and encourages capital flight.

Divide Between Legacy Industry and Startups

India’s startup ecosystem, particularly in Bengaluru, demonstrates a willingness to take risks and embrace failure. This culture has produced new ideas and global relevance. Yet, legacy industries remain resistant to change. If large sectors fail to adopt similar mindsets, India risks becoming an economy where innovation thrives only at the margins.

The Larger Signal

The ongoing millionaire exit is not a rejection of India’s growth story but a response to rigidity within its economic structure. Wealth is moving to systems where renewal feels possible and risk is rewarded. The trend underscores the need for greater competition, openness to failure, and sustained investment in innovation to retain capital and talent within the country.

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