Migration and money: the shifting patterns of the Indian diaspora

Changing patterns in Indian migration in Australia is also altering the flow of money between the two nations. Flickr/Chris Hacking

“This house, Australia. This house, Australia. This house, Australia,” says Mohinder (a pseudonym) 29, pointing out that young men from six of the 13 houses in his alley in TarnTaran have migrated.

“That house, Germany. That shop also Australia,” he adds. Mohinder himself migrated to Australia nine years ago with his family, leaving TarnTaran, a city of 1.1 million in Punjab, a northern state of India.

Back in TarnTaran for a visit, he says, ‘We have to go out of Punjab to get a job, go to Delhi, to Bangalore. If we have to leave Punjab, we might as well go to Sydney. You lose your sense of place anyway.’

This migration from Punjab particularly over the last ten years to Australia is a vote of no-confidence in the state by its middle and lower middle class families. It is also a continuation of a history of migration from the state, where people have gambled on migration to provide a better future for themselves and their families.

There is however, one significant change that relates to migration to Australia. During the 1970s, 80s and the 90s, money after a few years of arrival, flowed from Australia to India in family and community remittances. But in the 2000s, Australian education became a recognised pathway to migration. Families of the nearly 100,000 Indian students in 2010 paid A$ 2.9 billion, as a deposit on the possibility of migration and a better future.

This is a remarkable shift in the story of money and migration, as traditionally money was seen to flow from the destination country to the source country. The World Bank defines remittances as money sent by migrant workers to their source countries.

Remittances to developing countries are one of the largest global flows of money and are expected to be US$374 billion worldwide in 2012, with informal remittances to add another 50 per cent. Remittances overall can be greater than foreign direct investment and estimated to be three times official foreign aid. India in 2010 received the largest amount, at US$55 billion, followed closely by China at US$51 billion.

The RMIT University study on the Money in the Indian Diaspora documents this change to a two way flow of money, based on interviews with 86 migrants and community leaders in Australia between 2005 and 2010 and the ongoing multi-sited study in Australia and India which will cover 40 families with migrants to Australia.

The life stories of these families show it is not unusual for upper middle class families to help their children buy houses and start businesses, after they gain permanent residence in Australia. This two-way flow of money results from the cultural value of seeing money as a medium of caring in the family. In Indian families – as in other parts of Asia, the Pacific and Africa - money flows two ways between parents and children.

There are important gaps in our knowledge of money flows between Australia and India. But available data show that three times more money comes from India to Australia, compared to money going from Australia to India.

We know from the World Bank that A$3 billion went in outward remittances from Australia in 2009. We do not know how much goes from Australia to India in family and community remittances. Our interviews show that sending money home is one of the important ways sons show filial respect and caring for their families.

This has continued. One of our participants revealed that A$5,000 a day is remitted to India from one grocery shop in a south eastern suburb in Melbourne. It is divided across some 20 transactions, and is now going mainly to villages in India. This amounts to A$1.8 million a year just from one grocery shop for Money Gram and Western Union. We do know however that in 2010, families remitted $2.9 billion to Australia for the education of their children. This $2.9 billion is seen traditionally as part of Australia’s service exports, classified under trade rather than family remittances coming from India.

We have inadequate information on the public record about investment flows between the two countries. Our interviews show there is significant investment from India in housing and businesses and from Australia in housing, equities and non-resident Indian deposits. Families in India speak of paying A$450,000 for a house in outer Melbourne and report others who have sent up to $A1 million to help their children in business.

The Department of Foreign Affairs and Trade, Australia, notes that A$ 6.88 billion went from Australia to India in 2010-2011 – A$4.8 billion in investment and $2.08 billion in merchandise trade. We know that A$20.4 billion came from India to Australia. This takes into account the A$2.9 billion in education; A$1.6 billion documented as foreign direct investment by Austrade; and A$15.74 billion in merchandise trade.

The biography of money flows is important for connecting global money and personal lives. It makes clear that what is seen as trade money is also family money. It also shows that behind the investment figures may lie issues of family and belonging. Equally important is the enumeration of money flows. The dominance of money coming from India to Australia is changing the narrative of migration from that of settlement and subordination to one of mobility and interdependence.