Since time immemorial, humans, the roving creatures, have traveled to distant lands in pursuit of new opportunities and greener pastures. The forage continues and will continue in the foreseeable future as long as economic pressures lead people to choose the long way around.
As per the UN's International Organization for Migration, 281 million people, or 3.6% of the world's population, made up the international migrant population in 2020. Immigration over the past few decades has noticeably risen for immigrants from developing nations residing in more advanced countries and is especially apparent for highly sought-after skilled professionals who have been in high demand lately.
The benefits of immigration extend well beyond the individual benefits and encompass several benefits for both the country of origin and destination. Skilled migrants can often act as efficient conduits for a variety of international exchanges in a networked world, including trade, foreign direct investment, finance, knowledge, technology, entrepreneurship, cultural norms, and political ideologies.
Immigration's Economic Benefits for India
There is a sizable diaspora of Indians spread across all of the continents. According to the World Bank's Migration and Development Brief from November 2022, India is the largest recipient of remittances in the world. Thus, the biggest economic benefit for a country like India typically comes from remittances. Ever since 2006, remittance inflows into India have exceeded FDI inflows. Even in 2022, remittance inflows were projected to reach $100 billion, when FDI inflows totaled $84.84 billion.
Remittances are one of the leading sources of the nation's reserves, contributing over 20% of India's total foreign exchange reserves, which remained robust throughout the pandemic as well. Historically, remittances have risen during economic downturns, financial collapses, and natural calamities as migrants living abroad send more money to support their families back home.
When the balance of payments is under stress, the cushion of remittances can play a crucial role. These net inward transfers recorded in the current account have thus become essential to control India's widening current account deficit. Additionally, remittances support national stability by helping keep foreign reserves steady and maintaining the value of the Indian Rupee in relation to the US dollar. They significantly influence GDP by supporting the financing of household consumption (particularly during unfavorable circumstances), diversification of household income, low-risk exposure, and savings and investment.
Brain gain, or having access to technical data from the country's immigrant population, is another significant advantage of immigration. Immigrants can effectively channel a great deal of expertise back home because they are adept at communicating knowledge in a more readily understood way. Even studies suggest a strong positive correlation between the institutional quality of origin countries and average emigration rates.
India's IT revolution typically gives an insight into the brain gain narrative because it was in the years following the collapse of the dot-com bubble when several IT professionals from India who were compelled to return home, ignited this revolution. Likewise, other immigrant returns have also undertaken various innovative businesses, farming methods, and economic endeavors.
Other than these two major advantages, immigration can help the economy by easing the intense competition in the origin country, curbing unemployment, boosting earnings for the rest of the population, enhancing health and educational outcomes, reducing pressure on natural resources, and increasing productivity and financial access. It can also raise the imports of goods with a nostalgic appeal from the country of origin.
Even though some experts might differ and may argue otherwise, especially in specific instances of gains for the origin country, it has been demonstrated that immigration fosters economic expansion and increases overall global GDP. And since every coin has two sides, ignoring individual variation, the economic impact of immigration has remained reasonably positive for India.