Earlier in the day, we discussed the impact of a tighter US immigration policy regime on India. At the margin, will it lead skilled Indians to return to India? Nitin Pai in The Print gives a conditional yes as an answer.
Even if pay scales were equivalent (say in terms of purchasing power parity), few NRIs would trade the comfort, security and quality of life in a developed country and come back and face the challenges of daily life in India. Despite sentimental links, patriotic feelings and family connections, most NRIs prefer to live abroad. It won’t change because of government schemes, no matter how attractive they are on paper.
This idea can be conceptualised as two forces acting in the opposite direction. One force is a “India” premium — the extra salary that would compensate for the returnee’s lower quality of life in India. A force in the opposite direction is the “motherland” discount — the discount arising out of patriotic and familial considerations, leading people to stay back or return to India. It is the interplay between these two forces that will decide the direction of skilled labour flows.
As of today, the “India” premium is way larger than the “motherland” discount. Closing this gap is necessary to convert US immigration policy into an opportunity for India.