Indeed, from some angles you can look at Modi's foreign visits as attempting to meet the most important international leaders and establish a reputation with the global community. But his travels have also taken him to a number of countries with largest populations of Indians outside India, including the Nepal, the United States, Sri Lanka, Australia, France and even Fiji.
A lot of money
All of these count as among the top 20 countries with persons of Indian origin living outside India. But it's not just because Modi would like to endear himself to people of Indian origin, many of whom were huge proponents of his candidacy in the run up to last year's election, that he is visiting these countries. They also happen to send a lot of money back home. A lot.
A staggering $70 billion came to India in 2014, from remittances according to the World Bank, a figure that has stayed somewhat steady over the last few years. As IndiaSpend points out, that figure is equal to "four bullet-train corridors, more than the money the government raised from auctioning 67 coal blocks, and more than the money Indian companies collectively raised from the market in 2014."
And that's not all that the $70 billion figure is large than. It's also double the amount of Foreign Direct Investment India received in 2014. According to the United Nations Conference on Trade and Development, India saw $35 billion in FDI inflows last year, suggesting that, for all our talk of foreign investment, the importance of reaching out to Indians abroad who send money home is as important.
Break that down further into which countries are sending India that much money in remittances, and the choice of Modi's foreign trips become significant in more ways than one.
Modi has visited three of the top 10 countries that send money back to India – the US, Canada and Nepal – and is slated to go to a fourth, the United Kingdom, as soon as elections in that country have been completed. Plans are also on for the PM to visit one of the six countries that make up the Gulf Cooperation Council, which fill up the rest of the top 10. Just outside the top 10 sits Australia, which Modi has already visited. (Curiously, Pakistan also shows up in the top 10 according to the World Bank data, but for Modi to go there a lot of other things would have to happen).
But of course, foreign investment achieves something a little different from remittances. Although the later helps us build up foreign reserves, that money doesn't automatically go into the kinds of projects which the government feels need immediate attention. FDI can do that.
Again, a closer look at where Indian FDI comes from tells us why Modi is even more keen to court Indians living abroad.
A huge amount of FDI turns out to come from Mauritius, Singapore, the Netherlands and Cyprus, not countries you would be expecting. Analysts generally tend to look at these as tax havens, and believe that the amount is inflated by round-tripping of funds, essentially Indians either living here or abroad who divert their funds through these havens for tax purposes.
Here too, Modi has visited five of the countries in the top 10 list and is slated to go to the UK later this year as well. Even when being used as an offshore financial centre, a country like Mauritius, with a huge diaspora that also sends a lot of money to India, is crucial, which is why Modi has made it a point to visit.
Going by this measure, what should be next on his agenda? A Gulf country, like the United Arab Emirates, and Singapore.
