Opinion | The Diaspora Dilemma: Taxation, Dual Citizenship, And Voting Rights

2025/01/10 Leave a comment

Interesting take from an Indian perspective (interestingly, Canada does not figure among destination countries perhaps reflecting fewer taxation issues but Canadian NRIs form 6.4 percent of total, 2024 data):

In 2023, India received a staggering $125 billion in remittances. The number of NRI and OCI card holders is upwards of 32 million individuals. The numbers are staggering, undeniably highlighting the immense contribution of the Indian diaspora. However, beneath these impressive figures lies a complex relationship, a balancing act between celebrating the global Indian presence and addressing their very real challenges and aspirations.

The Tax‘ing’ Reality

One of the most persistent hurdles for Non-Resident Indians (NRIs) is navigating the labyrinthine Indian tax system. Double taxation looms large, a significant concern for many. Indeed, a recent survey revealed that double taxation is a primary concern for a considerable percentage of NRIs across various countries: 14.11 per cent in Australia, 13.10 per cent in the UK, and 8.06 per cent in the US, to be precise.

Compounding this issue is the difficulty in accessing necessary taxation documents from abroad. The same survey highlighted this struggle, with 12.10 per cent of NRIs in the US, 9.05 per cent in the UK, and 6.02 per cent in Australia reporting this as a major challenge.

Furthermore, accessing crucial taxation documents from abroad adds another layer of difficulty. For 12.10 per cent of NRIs in the US, 9.05 per cent in the UK, and 6.02 per cent in Australia, simply obtaining the necessary paperwork is a significant challenge.

Despite government efforts, tax-related issues continue to proliferate. Streamlining these processes would be a tangible step towards acknowledging the economic contributions of the diaspora.

A Voice Without A Vote?

Democracy thrives on participation, yet for many NRIs, the right to exercise their franchise remains largely symbolic. The numbers paint a concerning picture of poor electoral participation among overseas Indian voters in the 2024 Lok Sabha polls. Despite nearly 1.2 lakh NRIs registering as electors, a minuscule number actually turned up to vote.

The Election Commission’s data reveals a stark truth: only 2,958 overseas electors flew down to India to participate in the “largest democratic exercise in the world,” and a staggering 2,670 of those were from Kerala alone. The fact that several large states like Karnataka, Uttar Pradesh, and Tamil Nadu saw zero turnout of overseas electors speaks volumes.

The reasons behind this dismal participation are not hard to fathom. The current electoral law mandates that registered NRI voters must physically travel to their respective Lok Sabha and assembly constituencies to cast their vote, presenting their original passports as proof of identity. This requirement poses significant logistical and financial hurdles. Travel costs, employment obligations, and educational commitments abroad make it virtually impossible for the vast majority of NRIs to exercise their right to vote.

The Election Commission itself acknowledges these challenges, having proposed extending the Electronically Transmitted Postal Ballot System (ETPBS) facility to overseas voters – a move that, unfortunately, is still in the works.

The Dual Citizenship Conundrum

The concept of dual citizenship for Indians living abroad is a topic of enduring debate, fraught with both promise and perceived peril. As External Affairs Minister S Jaishankar rightly pointed out in 2023, offering dual citizenship presents “security and economic challenges.” Concerns linger about the potential for divided loyalties and the complexities of managing citizens with allegiance to multiple nations.

However, the desire for dual citizenship among the diaspora is palpable, driven by a yearning to maintain their connection with India while fully participating in their adopted homelands.

The OCI card, while offering certain privileges like multiple entries and a lifelong visa, falls short of granting full citizenship rights. It excludes OCIs from political and electoral life, preventing them from holding government jobs or acquiring agricultural land. For many, the OCI status feels like a consolation prize, not a true recognition of their continued connection to India.

NRIs And National Interest

India’s diaspora is far more than just a reliable source of remittances; it’s a vibrant and powerful extension of India’s global influence. Their achievements paint a compelling picture of Indian talent and capability on the world stage. Consider the example of Indian-origin CEOs leading global tech giants – their success stories become India’s success stories, bolstering its image as a hub of innovation and technological prowess.

Similarly, the growing number of Indian-origin politicians in positions of power across Western nations offers India valuable access and understanding within these critical geopolitical spheres.

This widespread network acts as a bridge, fostering greater cultural understanding and goodwill. The global popularity of Indian cuisine, yoga, and Bollywood, often championed and celebrated by the diaspora, introduces aspects of Indian culture to a wider audience, creating a positive association with the country. Moreover, these established communities often serve as vital conduits for diplomatic and economic engagement.

Bridging The Divide

The challenges faced by the Indian diaspora are not insurmountable. Addressing them requires a nuanced approach that carefully balances national interests with the genuine needs and aspirations of its global citizenry. Streamlining taxation processes, exploring viable options for remote voting, and seriously considering the merits of dual citizenship are crucial steps towards fostering a more robust and mutually beneficial relationship. Ignoring the challenges risks alienating a significant segment of the Indian community, a community whose contributions are vital to India’s economic and cultural standing on the world stage.

Source: Opinion | The Diaspora Dilemma: Taxation, Dual Citizenship, And Voting Rights

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