Financial Services and Overseas Indian Community

The development potential of the considerable number of Overseas Indian community — expatriate Indians as also those born abroad — can be catalysed into action on ground across key sectors: Industry, Investment and Trade; Technological Innovation and Entrepreneurship; Skills Development; Social Sector Development and also in driving creativity in the fields of Arts and Culture. This would, however, require an appropriate policy environment conducive to ‘enabling’ their engagement and supported by an effective institutional framework to ‘facilitate’ such an engagement. Meeting these two imperatives will remain the ‘necessary’ conditions for a robust, sustained and mutually beneficial engagement; these do not , however, constitute a ‘sufficient’ condition. This has resulted in less than optimal outcomes for India as well as its overseas community. The Ministry has been conscious of this fact and it has tried the following to address the situation. The Indian Diaspora shares a unique and strong bond with India, which in the economic sphere, is best exemplified though the remittances of Overseas Indians. India continues to lead globally in being the highest recipient of remittances yet again with a massive US$55 billion in its reserve basket along with growing NRI deposits. The Overseas Indian community continues to sustain its confidence in the home country. According to the World Bank’s Migration and Remittance Factbook 2011, remittances have contributed to almost 3.9 percent of India’s GDP in the year 2009. Where the share of remittances going for private consumption purposes has been the highest, Diaspora investments, though not a significant fraction, have largely been concentrated in land, property and securities. The UNCTAD World Investment Report (WIR) 2009, in its analysis of the global trends and sustained growth of Foreign Direct Investment (FDI) inflows, has reported India as the third most attractive location for FDI for 2009-2011. According to the WIR 2009 report, the top five most attractive locations for FDI for 2009-11 were China, United States, India, Brazil and the Russian Federation.

Non-Resident Indian Scheme

The general policy and facilities for Foreign Direct Investment are applicable to NRIs as well. In addition, the Government has extended some additional facilities to NRIs, which include investments in the real-estate and civil aviation sectors up to 100 percent, besides a liberal investment regime on a nonrepatriation basis.

NRI Investment

During August 1991 to December 2010, NRI inflows accounted for Rs. 29,347 crore (US$7,354 million). These include the inflow of special NRI schemes administered by the Reserve Bank of India (RBI). Separate data on NRI investments is not maintained by RBI. However, the above data on NRI investments pertains to investment made by NRIs as individual investors, as reported by RBI. (Source: Annual Repor of Department of Industrial Policy and Promotion (2010-11) Therefore, it becomes imperative for the Ministry to not only facilitate innovative investment practices and policy initiatives but also to establish an institutional framework to expand the 27 millionstrong Indian Diaspora’s economic engagement with India by investing its time, wealth and knowledge in ‘Opportunity India’ in order to maximise the longterm economic returns emerging from the engagement. The focus of the Financial Services Division, therefore, is on the following:

  • Facilitating ease of doing business in India without adding to transaction costs;
  • Enabling the Overseas Indian investor to benefit from the opportunities in India by facilitating appropriate advisory and handholding services through market-driven knowledge partners;
  • Catalysing sustainable Business-to-Business (B-to-B) partnerships between Indian and Overseas Indian businesses.
  • Enabling value addition to the investible knowledge, skills and expertise of Overseas Indians.

Awareness-cum-Publicity Campaign

The Ministry has been running an awareness campaign since 2007. The objectives of the campaign is to create wider awareness among the general public about the processes of legal immigration; cautioning people about illegal practices followed by fraudulent Recruiting Agencies; and, to provide information to emigrants/intending emigrants to ensure legal, safe and orderly migration. The awareness campaign is on the following issues:

  • Problems faced by emigrant workers and legal emigration process;
  • Problems relating to Indian housemaids overseas;
  • Problems relating to NRI marriages; and,
  • Overseas Workers Resource Centre (OWRC) Helpline

The awareness campaign is necessary because the outflow of potential emigrants going overseas in search of jobs has substantially increased in the last five years. This is expected to increase further in the coming years as demand for Indian labour has been increasing. During the year 2011-12, MOIA has run an awareness campaign through the following media: 1. Doordarshan 2. AIR (Prasar Bharati) 3. Lok Sabha TV 4. Private National as well as Regional Channels 5. National as well as Regional Dailies The campaign was run over a period of 100 days during this year. It aims to cover the complete length and breadth of the country. The number of potential migrants seeking information and clarification on the OWRC Helpline has increased substantially since the awareness campaign was initiated.

Prime Minister’s Global Advisory Council (PMGAC)

The Ministry has constituted the Prime Minister’s Global Advisory Council of People of Indian Origin (PMGAC-OI) to draw upon the experience and knowledge of eminent people of Indian origin in diverse fields from across the world. The Council is chaired by the Prime Minister. The functions of the Council are: (i) Serve as a platform for the Prime Minister to draw upon the experience, knowledge and wisdom of the best Indian minds wherever they may be based; (ii) Develop an inclusive agenda for a two-way engagement between India and Overseas Indians; (iii) Consider ways and means for accessing the skills and knowledge of the Indian Diaspora for meeting India’s development goals and facilitating investments by Overseas Indians into India; and, (iv) Institution and capacity building in India to respond to the economic, social and cultural needs of the Overseas Indian community. The advice of the Council is recommendatory in nature and serves as a valuable input for policy formulation and programme planning. Prime Minister Dr. Manmohan Singh presided over the third meeting of the Global Advisory Council of Overseas Indians on January 8, 2012 at Raj Bhawan, Jaipur. The Members of the Council unanimously thanked the Prime Minister for convening the third meeting of the Council at Jaipur and for allowing free exchange of views on matters concerning Overseas Indians. The members placed on record their appreciation that many of the suggestions made by them previously had been implemented. They include the merging of the OCI (Overseas Citizenship of India) and PIO (Peoples of Indian Origin) cards and the facilitation of voting rights for Non-Resident Indians. The members spoke about issues concerning higher education, particularly with reference to faculty development, engaging second- and third-generation Overseas Indians, Foreign Direct Investment in the retail sector, issues pertaining to governance, and how India could take a more proactive role in the discourse on globalisation. The members maintained that on balance, the tenor of reports about India in the international media showed that the global community had a healthy respect for India because of India’s strong fundamentals. In his remarks, the Prime Minister thanked the members for their constructive suggestions. With a slowdown in the United States and Europe, the Prime Minister noted that growth centres may now shift to the Asia-Pacific. He was confident that despite the many constraints, India would return to a sustained high annual growth path of 9-10 percent in the medium term. The Prime Minister further assured the Council that the Government would reflect on all the suggestions the Members had made and engage proactively with those ideas.

Overseas Indian Facilitation Centre (OIFC)

The Ministry has set up an Overseas Indian Facilitation Centre (OIFC) as a not-for-profit trust in partnership with the Confederation of Indian Industry (CII). The Centre is a ‘one-stop shop’ and seeks to serve the interests of the Overseas Indian community and has the mandate to cover two broad areas viz: Investment Facilitation and Knowledge Networking. The objectives of the Centre are: (i) Promote Overseas Indian investments into India and facilitate business partnerships; (ii) Establish and maintain a Diaspora Knowledge Network; (iii) Function as a clearing house for all investment related information; (iv) Assist Indian States to project investment opportunities to Overseas Indians; and, (v) Provide advisory services to PIOs and NRIs. In line with its mandate, OIFC continues to serve as an information resource centre for the Diaspora, regularly updating them with state-sector investment opportunities, trends and economic overviews through its business networking portal (www.oifc.in) and a monthly e-newsletter titled ‘India Connect’, the subscription base of which has crossed 26,000. OIFC also publishes research papers and reports. It recently published a handbook titled ‘Returning Indians – All that you need to know’, which was released by the Hon’ble Prime Minister of India at the 10th Pravasi Bharatiya Divas (PBD), held in January 2012 in Jaipur. OIFC also has a forum on its portal to address queries from the Diaspora. The Centre today has on board various State Gov- ernments, diaspora/investment cells, industry stakeholders (banking, financial services, taxation and market entry services), and international business associations (serving the interests of the Diaspora) as its Partners. OIFC continues to address queries of the Indian Diaspora through its online 16×5 live facilitation service. It provides specialised advisory and consultation services through its State & Knowledge Partners, constantly adding to its cache of queries. It has addressed over 8,700 queries since the launch of the OIFC business networking portal in January 2010. It also assists its State Partners in projecting their investment opportunities at relevant OIFC forums and through dedicated web pages on its portal. The business portal also supports registration of business networks and an online business matchmaking directory. It offers an engaged networking platform with moderated discussions on relevant subjects/topics of interest for Diaspora investors with businesses and professionals in India. The online registrations for the network have grown to over 7,000. Interestingly, a number of individuals in their capacity as potential innovators with focused business interests are joining the network and are exploring India as a favourable destination to establish/expand their businesses. OIFC also showcases opportunities for investment and business engagement through its Diaspora engagement meets. The Central Government, in its endeavour to strengthen the Diaspora’s economic linkages with India, seeks to encourage the Overseas Indians to make use of the OIFC platform to connect with India.

Pravasi Bharatiya Kendra (PBK)
To commemorate the trials and tribulations as well as the subsequent evolution and achievements of the Indian Diaspora, it has been decided to establish a Pravasi Bharatiya Kendra (PBK) at Chankayapuri, New Delhi, at an estimated cost of Rs.79.19 crore. The National Building Construction Corporation has been appointed turnkey Consultant and Project Manager. The Kendra, over time, is expected to become the focal point for interaction — social, cultural and economic — with and among all Overseas Indians. It will also serve as a research and documentation centre and host a permanent exhibition. The Kendra would, among others, have the following facilities: i) A Library/Research Centre ii) Flexible capacity meeting rooms iii) An Indian Cultural Centre iv) A state of the art 500-seater auditorium v) A permanent exhibition space vi) Fully serviced guest rooms vii) Full-fledged Business Centres viii) A restaurant & adequate basement parking ix) 100 percent power back-up The ground-breaking ceremony of the Pravasi Bharatiya Kendra by Hon’ble Minister of Overseas Indian Affairs was held on April 28, 2011.