Why Students Are Leaving India?

The surge in Indian students studying abroad has reached an alarming level.

In 2023, around 13.2 lakh (1.32 million) Indian students went to 68 countries for higher education. The top destinations were Canada, with 4.27 lakh students; the USA, with 3.51 lakh; the UAE, with 2.47 lakh; and Australia, with 1.25 lakh.

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This trend is expected to worsen due to the high tax burden on Indian citizens, which has increased over the past decade.

In the Budget 2024, Finance Minister Nirmala Sitharaman announced an increase in the standard deduction under the New Tax Regime from ₹50,000 to ₹75,000. At the same time, taxes on Long-term Capital Gains (LTCG) and Short-term Capital Gains (STCG) were raised to 12.5% and 20%, respectively.

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These tax hikes are likely to make studying abroad a more attractive option for many students.

Students are already drawn to the higher salaries and better job opportunities available in other countries. With the rising tax burden at home, the allure of a more prosperous future abroad becomes even stronger.

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Many students who go abroad for their education may choose to settle there, which could reduce India’s population by up to 1 crore (10 million) if they bring their families with them.

The financial impact is substantial, with approximately ₹33,000 crores being spent on education abroad, money that could otherwise benefit the Indian economy.

Looking ahead, the number of students going abroad is expected to increase, driven by the pursuit of better education and living standards.

This growing trend underscores the urgent need for reforms in India’s education system. To retain students, India must improve its educational quality and offer more opportunities. Without these changes, the country will continue to face a significant brain drain.