Every year, hundreds of thousands of Indian students flock overseas to pursue their education abroad. In 2022, there were 1.4 million Indian students abroad, of whom 35% studied in the U.S. where they constitute the largest group of international students. These students often head overseas to advance their careers, with many choosing to stay abroad.

As a result, India has a significantly larger emigrant population than any other nation; the U.S. alone has 4.6 million Indian-born migrants. But with other countries benefiting from an influx of bright, talented students and migrants, what impact does this all have on India? Is India slowly being drained of its talented young adults?

While some are concerned by this talent outflow, there are also positives to this migration: India, like many other countries, gains tremendously from its large and connected foreign diaspora through “brain circulation,” where talent is freely mobile and able to enrich itself with global experiences and networks. This interconnectedness not only brings back knowledge and innovative ideas to the home country but also fosters economic growth and technological innovation in all countries.

Remittances Benefits India

The most obvious and measurable way that Indians overseas contribute to India is through remittances. According to the World Bank, India is by far the world’s largest recipient of remittances from abroad, receiving US$125 billion in 2023. These remittances are often crucial for Indian families, helping to reduce poverty, improve nutrition and build household resilience.

And highly educated Indian emigrants help build talent pipelines for those behind them, charting a path of success for future generations. This is more than anecdotal: Docquier and Rapoport and Beine et al report a positive correlation in their research between highly skilled immigrants and changes in the level of human capital in their origin country. In the case of India, there is evidence that the U.S. H-1B temporary work visa – the pathway for many high-skilled Indians to the U.S. – has had positive impacts for both the U.S. and Indian technology sectors by spurring the IT boom in India as well and by influencing workers’ choice of occupations in both countries.

Returning Indians Spark Economic Growth

India has benefited tremendously from “return migration,” when its citizens return home after a stint abroad. Once back in India, many Indians create businesses that contribute to India’s economy, spurring a major recent tech boom, establishing India’s version of Silicon Valley and creating thousands of jobs in cities such as Bengaluru and Hyderabad. Returning expatriates also bring with them capital and international contacts, significantly contributing to India’’s entrepreneurial ecosystem.

Notable examples of foreign-educated Indian entrepreneurs who returned home include: Stanford-educated Azim Premji, the founder of Wipro; Ratan Tata, the founder of the Tata Group, who was educated at Cornell and Harvard Business School; and Kunal Bahl, co-founder of Snapdeal, one of India’s leading online marketplaces, who was educated at Wharton and worked at Microsoft.

These impacts are also evident across other key areas of economic and social development. Foreign-trained Indian engineers contributed to establishing India’s vast Aadhaar (digital ID) system, and some of India’s newest and most innovative universities such as Ashoka University, the Indian School of Business (ISB) and Plaksha University have been founded and led by Indians who were educated in the U.S.

Indians remaining abroad continue to help

But even those who stay abroad continue to champion Indian progress and contribute economically to their homeland. Consider Satya Nadella, who was born in Hyderabad and completed his education in the United States before eventually leading Microsoft. Under his leadership, the company has made considerable capital investments in India to produce goods for global export. In early 2024, Nadella announced that Microsoft will provide two million Indians with artificial intelligence skills by 2025, strengthening India’s ability to thrive in this pioneering industry.

Despite ongoing challenges with inequitable access to postsecondary education in India and especially the opportunity to study abroad, the free flow and symbiotic exchange of migrants and capital is equally a reality for modern India, ultimately enhancing its position on the global stage. And Indian leaders are increasingly realizing this. Prime Minister Modi’s 2014 election manifesto described the diaspora as “a vast reservoir to articulate the national interests and affairs globally” that would be “harnessed for strengthening Brand India.”

India leverages brain ‘circulation’

India hasn’t been a passive observer of brain circulation, but has launched smart policies to enhance it. For the first time ever, the National Education Policy (NEP) underscores the importance of global engagement in higher education, while national initiatives like the Ramanujan Fellowship and the Visiting Advanced Joint Research (VAJRA) Faculty Scheme are designed to encourage non-resident Indian scientists and researchers to pursue projects in India.

The Overseas Citizenship of India program provides a lifelong visa and many rights to the Indian diaspora, while other programs help the diaspora discover its Indian roots and help Indian firms provide internships and short-term employment opportunities to young diaspora professionals.

Rather than perceiving the migration of skilled talent as a loss, it is more constructive to view it as a strategic asset that can drive India’s economic growth, technological advancement and global influence. India should embrace brain circulation to help it further emerge as a new superpower, while also strengthening policies and incentives that retain talent at home and attract talent from the global Indian diaspora.

(Authors: Sasha Ramani heads corporate strategy for MPOWER Financing, which offers scholarships and no-cosigner loans to students from India and around the world to pursue their study abroad journey in the United States and Canada.

Dr. Rajika Bhandari is principal of Rajika Bhandari Advisors, an international education research and strategy firm, and an author and speaker on international student mobility.)