While mercantilism and trade wars are back in fashion, a consistent strategy in macroeconomics has been the resistance to the brain drain. In the case of the US, the ability to attract highly productive immigrants was historically advantageous.
But as the 21st century progresses, there is a differing of attitudes between the two most populous nations of China and India. Beijing has spent years trying to lure talent back with various brain drain initiatives, while India is looking towards brain circulation. The strategy is to leverage its 35-million-strong diaspora as a global asset rather than an estranged resource.
India has effectively de-risked its economic future by embedding its human capital within the infrastructure of every major Western economy, creating a level of systemic interdependence that a more centralized, return-only model cannot achieve.
In nations like Canada, this influence is clear as day. The Indian community has become a huge part of the professional and political landscape - it’s driven innovation in all the major tech hubs. As more migrate there, the ability to transfer money to India from Canada has moved from a simple family obligation into bilateral economic fuel.
Undermining the brain drain fear
The difference lies in the relationship between the state and its citizens abroad. China’s strategy is all about repatriation, which is to bring scientists and engineers back to fuel domestic state-run industries. Whenever the state does encourage it, it’s often to bring back new knowledge.
India, though, has created a "Global Indian" identity where the diaspora is encouraged to integrate, succeed, and remain in Western democracies. It creates a soft-power network that China, with its tightening state controls, hasn’t got.
Good evidence of this mindset came just the other day by the EU-India Free Trade Agreement and Talent Partnership. This deal eases mobility for Indian IT professionals and healthcare workers across the European Union. It’s an agreement that shows a pivot in global diplomacy where the "trade of talent" is becoming more valuable than the trade of physical goods - and India has a lot of it.
India’s demographic dividend is not just about numbers of course, but a plug-and-play compatibility with the Western economy. With a median age of 28 and widespread English proficiency, Indian migrants integrate into Western corporate and legislative structures very well - much faster than their Chinese counterparts. In Canada for example, this has translated into a high proportion of Indo-Canadians holding influential roles in government and tech. Here, we could see influences in national policy, a truly powerful dividend for India.
Financial fluidity
The impact of this circulation model is hard to overestimate. While China’s remittance inflows have stagnated as its diaspora becomes more insular or returns home, India’s inflows reached record highs in 2025.
This keeps the diaspora invested in India’s growth and the mobility is underpinned by an increasingly sophisticated infrastructure for international money transfers - it means that some of the wealth generated in London, New York, or Toronto directly fuels development in Bengaluru and Delhi. Unlike foreign direct investment, which can be volatile and cut off, these individual transfers function as a form of counter-cyclical capital that provides a unique social safety net for the Indian economy - it’s profoundly diversified across the world and continues even during periods of global market instability.
