Members of the Indian community in the US gather in New York to celebrate India's Independence Day

India is generally comfortable about the idea of India. The idea of India abroad is quite another matter. If understanding were to flourish, resulting in a union of mutual benefit that goes beyond the familial give and take through matrimonial columns, it has the potential to transform India.

It can be tricky. As Nobel prize-winning author Sir Vidiadhar Naipaul said about migrants, "After two or three generations, traditions cannot be maintained. They will strictly not be Indian people ... As migrants generally adapt there is really no idea left of India, no profound idea of India, beyond some sentimental attachment." This needs to be urgently shaped into opportunity.

Only since the mid-1990s has the government begun to distinguish between People of Indian Origin and Non-Resident Indians. Earlier used interchangeably to describe descendants of 19th century settlers in Caribbean and African plantations, contract workers in the Gulf, traders in the UK, South-east Asia and East Africa, and Silicon Valley stars in a broad sweep, the definitions are now clear. PIOs have adopted the citizenship of another country. NRIs, who comprise a third of India's Diaspora, still carry an Indian passport.

Together, these 20 million and counting, ranging from the first to the fifth generation, went away and built for themselves a better life, good careers and, sometimes, fabulous wealth from scratch. Today they account for an economic output of about $400 billion (Rs 19,40,000 crore), an astounding four-fifth of India's economy.

What gives? A lot can. Ask China.

Basically, while the Chinese establishment may politically belittle its people, it greatly respects their money and it doesn't care a whit how it comes and where it comes from, as long as it keeps coming. In August 1990, around the mid-life of the People's Republic's investment drive-almost a year before India's hyped announcement of economic reforms-China promulgated a decree titled "Provisions of the State Council Concerning the Encouragement of Investments by Overseas Chinese and Compatriots from Hong Kong and Macau". In 20 succinct points, it detailed among other things that the state would not nationalise any investment by them or assets they own; they could also invest freely in China's "inland areas"-as distinct from special economic zones established to attract tens of billions of dollars in investment from Japan, North America and Europe; they could borrow from financial institutions in inland areas; and they could appoint their relatives or friends in China as agents, so long as they had appropriate letters of authority. And multiple entry visas would be issued smoothly.

It was important for China, an avowed communist state adopting capitalist lure, to spell out guarantees. Besides, while its economic liberalisation programme mainly built around special economic zones was in place, foreign direct investment, though impressive, wasn't enough for fuelling stratospheric growth and the enormous increase China wanted in its exports. There was another crucial point: if even a small fraction of China's Diaspora of over 50 million were to pump in money, especially from Hong Kong and Macau, it would be an immense vote of confidence in China's ability to take over the administration of these territories from UK and Portugal after 1997. Essentially, they would make people of Chinese origin stakeholders in China's "glorious" future. The sum of the parts was-and is-so crucial for China that it has one minister and three vice-ministers to channel its purpose.

So far, it has worked brilliantly. The move mixed ethnic niceties with economic need, bringing money in from people who had left mainland China to escape numbing poverty, rigid hierarchy, grinding politics and perceived lack of opportunity-similar to the Indian trend.

Overseas Chinese now bring in $30 billion and upwards a year in investment-accounting for half the country's annual inflow-a significant 15 per cent of which comes from the People's Republic's sworn enemies across the Strait of Taiwan. What they do in a single year matches India's decade-long effort to attract foreign investment.

DOING A CHINA? ABSOLUTELY.

It took until 2000 for the government of India to acknowledge that there was a need to institutionalise things, to organise an act-global, think-local compact based on more interaction and return on investment. Exactly 10 years to the day after China's decree on overseas Chinese, on August 18, 2000, India's Ministry of External Affairs put out a note mentioning the Government had "decided to appoint a High Level Committee on the Indian Diaspora". Among other things, it would "study the role that PIOs and NRIs may play in the economic and social and technological development of India" and recommend a policy for "forging a mutually beneficial relationship". The five-member committee chaired by Rajya Sabha member and former high commissioner to the United Kingdom L.M. Singhvi presented its recommendations to Prime Minister Atal Bihari Vajpayee in early 2002.

Arguably one of the best researched and lucidly presented documents on PIOs and NRIs, it bluntly underscored that Indians abroad need value propositions stronger than emotional ties. Among other things, the committee also stressed that the PIO card-in effect a multiple entry visa for 20 years that cost $1,000 (Rs 48,500)-introduced a year ago by the Government needs to be made cheaper, and special economic zones created for PIO and NRI investment with full labour, power and infrastructure backup. The government could consider extending the olive branch of dual citizenship beyond PIOs based in developed countries. And the capstone: set up an empowered single-window organisation in India to address all needs of NRIs and PIOs, a Planning Commission-type organisation with bite.

Some suggestions have already kicked in. From September 15, the fee for PIO cards has been reduced to Rs 15,000. Vajpayee announced that January 9 every year, the day in 1915 Mohandas Gandhi returned to India from South Africa, would be celebrated as Pravasi Bharatiya Day. In addition, a three-day Government-hosted Diaspora extravaganza in association with the Federation of Indian Chambers of Commerce and Industry is planned for launch on January 9, 2003. Besides boasting a star line-up that includes Nobel laureates Amartya Sen and Naipaul, 10 prominent PIOs and NRIs would be given awards.

It is unlikely to set the stage on fire but undeniably, public acknowledgement and adulation in the "home country" will help formalise the shift from mere talk to active policy.

GROWING PAINS, GROWING POWER

The truth has stared at India's face for a decade. In South Africa, eastern Africa, Trinidad, Guyana, Mauritius, Fiji and Malaysia, Indians started out as indentured plantation labour in the 19th and early 20th centuries. Through sheer grit they have pushed past appalling poverty to emerge generations later in pivotal positions in trade, commerce and, increasingly, politics of their adopted homelands. The stream of traders and professionals who upped and left from the 1960s onwards, heading for the UK, United States, Australia and East Asia in a steady trickle, what Naipaul calls a "middle-class movement", has emerged as the most powerful stream-economically and politically-of the Diaspora.

Even the much-derided "Gulfies", drawn from a dozen Indian states, have collective clout. Travelling to the Persian Gulf region for two and three-year contracts, this rotating army of about 2.5 million remitted $5 billion (Rs 24, 250 crore) home last year, adding considerably to India's foreign exchange reserves. (It's not an exaggeration to mention that more than the International Monetary Fund, remittance from India's Gulf brigade helped tide over India's acute foreign-exchange squeeze in the early 1990s.)

Today, it is no coincidence that Mauritius ranks as India's second-largest overseas investor. It has to do with the island nation's leaders of Indian origin who inked a double taxation avoidance treaty with India, giving tax breaks for investments to India routed through Mauritius. In the United States, Silicon Valley runs on the microchip of Indian technological manpower expertise. Globally, the transnational manager of Indian origin is a hot property in human resource, in leading positions in such organisations as Citibank, Standard Chartered, Pepsi, Unilever, Lucent, and McKinsey & Company.

The Indian American vote is an important enough segment in numerous American states for Democrats such as former president Bill Clinton, his senator wife Hillary and even dyed-in-the-wool conservative Republicans to woo them. In Canada, an emigrant from Punjab, Ujjal Dosanjh is the premier of the province of British Columbia; political analysts do not put a bid for the premiership of Canada beyond him. In United Kingdom, Prime Minister Tony Blair and his wife Cherie quite often don Indian garb and attend high-powered dinners hosted by community leaders. The House of Lords counts among its peers Lord Paul of Marylebone, otherwise known as Swraj Paul, chairman of the Caparo Group who shook up the cosy assumptions of family-held business with his bid in the early 1980s to take over DCM and Escorts.

So far, big-ticket PIO-NRI investments have stayed away for the simple reason that unlike China, India is beset with confusion over economic reform and below-par infrastructure. The trouble, as countless NRI delegations have submitted to the government, is simply not worth it. Their views mirror the views of the rest of the global business community which, despite exhortations of India's potential, haven't exactly beaten the doors down with eagerness to invest.

The draw has had considerably more success in areas where returns are assured and opportunities plentiful-a pointer that policymakers surely cannot overlook. For example, post-9/11, the real-estate market in India brightened with NRIs looking for investment opportunities. The trend was boosted by this year's budget provisions permitting NRIs to freely repatriate sale proceeds and rental income.

THE BROTHERHOOD MEANS BUSINESS

The community's clout in the United States counts. Here, Bill and Hillary Clinton show at a family wedding of a well-known New York restaurateur

What Naipaul calls a 'middle-class movement' has emerged as the most powerful stream of the Diaspora.

The government is contemplating issuing bonds targeting NRIs. The move is inspired by the success of the Resurgent India Bonds in 1998 that fetched over $4 billion and the India Millennium Bonds of 2000 that brought in over $5 billion; the impressive collection owed for its success nothing more than a better rate of interest than available elsewhere.

The good news for India is that PIOs and NRIs are sometimes also driven by their desire to pay back a debt of honour to their homeland-or their home village. They also display a need, a relatively recent development, to participate more proactively in the shaping of India.

Sometimes it can turn nasty, such as the extreme feeling that drove the movement for Khalistan from the early 1980s, and the ongoing support for Kashmir's independence, both fuelled by Diaspora nationalism. Far less extreme but very vocal is the "Hyperlink Hindu nationalism" that academics like Anita Khandelwal of Harvard University highlight. It's driven by the spread of the Internet and superb networking effected by two organisations of the Sangh Parivar among the earliest to recognise, harness and benefit from the ideological force and funds of the PIO-NRI community: the Vishwa Hindu Parishad and the Rashtriya Swayamsevak Sangh.

Clicking a mouse and tapping into Indian media, resources, news and views round the clock-actually, the best thing to have happened to ensure constant contact-sections of PIOs and NRIs, backed by their considerable success, are sometimes seen by those in India as having too much interest in the country they first walked out on. In this context, PIO-NRI pitches for dual citizenship and the right to vote have been trashed by commentators in India as bizarre demands by those who have little stake in the country and would, by their disproportionate clout, skew the local voting pattern along with the cost of living. By way of example, they point to the last assembly elections in Punjab when NRI money funded the campaign of a local cousin or nephew.

While there is some merit in that concern, heightened interest of overseas Indians is unimpeachably a good thing. Where government has failed, overseas Indian money has stepped in, transforming numerous villages in Gujarat, Punjab and Kerala into places where sanitation, safe drinking water, primary education, health care and electricity are no longer an issue. The much-touted Simputer, the low-cost hand-help computer designed to help farmers, is born of NRI angel-funding. Few major political leaders are safe today from the dreaded PIO-NRI e-mail chain that demands action, from removing corruption to sorting out the disinvestment process.

Don't knock it. There is credible evidence that in August, the loss in primary elections to the US Congress of an incumbent Congresswoman from Georgia who talked about the "imminent break-up of India" because of its "separatist movements" was caused by the background work of the state's Indian lobby. They wholeheartedly campaigned for her opponent with time, energy and money.

Imagine what this collective power, multiplied manifold in an equation of synergy, can do. For them. For us.