Indians Built Dubai’s Oasis. Why Can’t We Build Our Own?

By Govindraj Ethiraj

The escalating conflict in the Gulf is forcing Indian expats and millionaires to flee. The tragedy is that returning home isn't on their itinerary.

About 25 years ago, Ravi Ruia, who founded the Essar Group with his late brother Shashi, asked me a simple question: Had I seen how countries like the United Arab Emirates were scaling up their infrastructure?

At the time, my answer was no. But his response has stayed with me ever since.

“You should visit and see,” Ruia told me in his expansive new office in south Mumbai. “It is all being built by Indians.”

It would be a few years before I finally took his advice. 

Around 2004, I found myself driving down Dubai’s arterial Sheikh Zayed Road—then well on its way to becoming one of the city’s most recognizable landmarks—en route to Dubai International Academic City. 

My destination was the SP Jain School of Global Management, which founder Nitish Jain had just established. 

As Jain showed me around the campus and the broader city, Ruia's words came back to me. 

In more ways than one, the vision unfolding in the desert was ahead of its time. And Indian hands were laying the foundation.

How Much Do Indians Contribute to the Gulf?

Over the last few decades, some nine million Indians have settled in West Asia. 

What began primarily as a migration of blue-collar workers has evolved into a sprawling diaspora that owns, operates, and staffs a vast array of businesses, from heavy construction to elite financial services and education. 

For many travellers flying out of Mumbai, Dubai is regarded as the closest "first-world" city—a mere two-and-a-half-hour flight away.

Yet, while Ruia referred to the role of Indians in building the hard infrastructure powering this Middle Eastern oasis, over the years, soft infrastructure has joined the list as well.

The economic ties are staggering. According to a Citi research note recently cited by CNBC, the Indian diaspora in the Gulf contributes nearly 38% of India’s total remittance inflows. Based on inflows of $135.4 billion for the 2025 financial year, the Gulf’s share equates to a massive $51.4 billion.

But as conflict engulfs the region, that vital economic pipeline is under threat. 

The Gulf’s Uncertain Future 

The unfortunate developments of the past few weeks have forced many to question the very assumptions that created the allure of cities like Dubai, Abu Dhabi, and Doha. 

The most pressing question for the ultra-wealthy: Is it still worth staying in Dubai simply for the tax benefits if the geopolitical roof is caving in?

The answer, it seems, is no. According to a Reuters report last week, several Asian and Indian millionaires who had previously offshored their wealth and residency to Dubai are now frantically attempting to transfer their funds to Singapore and Hong Kong. 

There is a rich irony here, of course, given that many of these same investors fled Hong Kong just a few years ago as Beijing tightened its grip over the once-autonomous financial hub.

But the glaring takeaway from this capital flight is what is missing from their list of alternative destinations. 

Why Aren’t Millionaires Returning To India? 

While Indian millionaires are exploring all available options to safeguard their assets, India itself does not appear to figure prominently in the equation—certainly not from a tax residency standpoint.

This raises a much larger, albeit rhetorical, question: How is it that Indians can build the Gulf states, contribute to their modern efficiency and opulence, and relocate their wealth there, yet remain entirely unable to reproduce that same degree of attractiveness in Mumbai or other major Indian metros?

For decades, India has treated the Gulf as its outsourced first-world playground—a place to earn tax-free wealth, enjoy world-class infrastructure, and send billions back home. But if there is one lesson to be drawn from the escalating crisis in West Asia, it is that outsourcing your quality of life is a fragile economic strategy.

If India truly wants to become a destination for global investment—and retain the vast wealth and talent of its own people—it must get its act together. That means moving beyond basic economic reforms and doing the hard work of making its own mega-cities livable, efficient, and attractive. Until we can build our own oasis, our capital will always be at the mercy of someone else's war.

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$2.3 billion

That’s how much foreign portfolio investors (FPIs) pulled about (around Rs 21,000 crore) out of Indian equities in March so far, reversing the strong inflows seen just a month earlier. The selling happened over four trading sessions between March 2 and March 6 as global risk sentiment weakened amid escalating tensions in West Asia.

The outflow follows a $2.7 billion (Rs 22,615 crore) inflow in February, which marked the highest monthly investment by foreign investors in 17 months.

Net FPI investment before that:

• January ‘26: FPIs withdrew Rs 35,962 crore

• December ‘25: FPIs withdrew Rs 22,611 crore

• November ‘25: FPIs withdrew Rs 3,765 crore

The Lead: Analysts attribute the latest sell-off largely to the intensifying conflict in West Asia. The geopolitical tensions have pushed crude oil prices higher and dampened global risk appetite. This matters for India because the country imports more than 80% of its crude oil needs, making markets sensitive to energy price shocks. Investors have also turned cautious because of elevated valuations in Indian equities and uncertainty around global interest rates.

The Shift: Even so, domestic investors continue to cushion the market. Domestic institutional investors and retail investors investing through systematic investment plans (SIPs) in mutual funds have continued to provide steady inflows, helping absorb part of the foreign selling pressure.

Deal Pushed Back

India and the United States have reset parts of their trade negotiations after the US Supreme Court struck down tariffs imposed by Donald Trump under emergency economic powers. The ruling has created uncertainty around the tariff framework that shaped recent trade discussions.

Pivot: Indian officials now say follow-up negotiations tied to the agreement could take another three to four months as Washington reassesses its tariff strategy and both sides revisit key provisions.

Trigger: The two countries announced an interim trade framework in February, aimed at easing tariff tensions and expanding commerce. The deal included a reduction in US tariffs on some Indian exports and India committing to large purchases of American goods, including energy supplies.

AC Prices Turn Up Heat

Summer has arrived, and AC makers say they will be increasing prices by 5-15%. Input costs are climbing, particularly for copper, a key component used in compressors and coils.

Fast Facts: A weaker rupee is raising the cost of imported components, while new energy-efficiency norms introduced this year raise efficiency thresholds. That means some models that earlier qualified as 5-star may now fall into lower categories, forcing manufacturers to redesign units with larger compressors and more copper.

Outcome: Manufacturers say these changes are pushing up production costs and forcing them to pass part of the burden on to consumers. The price hikes come just as demand is expected to surge, with forecasts of above-normal summer temperatures likely to boost AC sales across India.

Food Delivery Rebounds

Food delivery platforms Swiggy, magicpin and Zomato reported stronger order volumes in the October-December quarter, signalling a pickup after a period of slower expansion. Festive demand, aggressive affordability-focused offers and a steadily expanding user base helped drive the rebound.

Breakthrough: Platforms are increasingly targeting value-conscious consumers and rolling out new formats and features to boost orders, industry executives say. Smaller cities are also emerging as an important growth market as food delivery adoption spreads beyond metros.

By the Numbers: Magicpin said it had a particularly strong quarter, with order-level unit economics improving by more than 60% alongside better execution across markets. Gross order value also rose sharply in cities such as Bengaluru, Hyderabad and Mumbai. Companies expect the momentum to continue as they ramp up marketing, pricing strategies and product innovation.

Medical Travel Shock

Medical tourism to India could take a hit as the Middle East conflict disrupts travel from the region, a key source of international patients for private hospitals. Some hospitals say arrivals have already slowed amid flight disruptions and rising uncertainty.

How We Got Here: But analysts say the earnings impact may be limited. International patients contribute about 6-9% of revenue for large hospital chains, and only around 10% of those patients come from the Middle East.

Flashpoint: Brokerages including CLSA and Kotak say the market may already be pricing in the risk, with hospital stocks such as Apollo Hospitals, Fortis Healthcare and Max Healthcare seeing volatility. The bigger driver of medical tourism is actually Bangladesh, which accounts for roughly 55-60% of foreign patients, cushioning the potential blow.

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