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    India slips 5 spots on Henley Passport Index; here's how it affects the economy

    Synopsis

    In the last decade, only eight nations granted visa-free-access to Indian nationals.

    passport-travel-iStock-1035Getty Images
    India is 77th on the Ease of Doing Business Index and 86th on the Henley Passport Index.
    A scatter plot comparing the strength of a country’s passport and its rank on the World Bank’s Ease of Doing Business Index shows that countries whose citizens can travel unhindered across borders have more vibrant economies.

    Travel and trade have been have happened in conjunction since medieval times. The correlation between the two has been strengthened since the advent of globalization, as per a research paper published by N. Kulendran and Kenneth Wilson in the Journal of Applied Economics. The movement of people across international borders has increased over the past few years, but data pertaining to passport approvals and foreign investment show that countries that have stronger passports have a more conducive business environment.

    The strength of a passport is defined as the countries to which holders are eligible to travel without a visa. This implies that passport holders can obtain a visa on arrival, an electronic travel authority, or a visitor’s permit when entering the destination country. According to the Henley Passport Index 2019, the strength of the Indian passport has weakened considerably in the last decade. India slipped nine places on the list, from 77 in 2010 to 86 in 2019. In the last decade, only eight nations granted visa-free-access to Indian nationals.


    According to the annual Henley Passport Index, India’s rank hit a decadal high of 74 in 2013. Between 2014 and 2015, India slipped 12 places, from 76 to 88. Its present rank of 86 represents a five place decline from 81 last year. As of today, India nationals can travel to 58 countries with a pre-approved visa, lower than that of war-torn countries like Colombia (124). Moreover, India ranks below other BRICS countries, with which are at a similar stage in their economic development.

    Despite being shanghaied by the U.S. in a bitter trade war, China fared well on both the Henley and Ease of Doing Business indices. In the past decade, China advanced 14 places on the Henley Index, ranking 74th in 2019. Brazil rose 10 places to be ranked 18th in 2019. Russia and South Africa were the other laggards in the BRICS quintet, slipping two and seven places respectively. However, both Russia and South Africa are ranked above India.


    While the Henley Passport Index is by no means the only indicator to gauge the mobility of a country’s citizens, it gives a fair estimate of cross border flows of people. A scatter plot comparing the strength of a country’s passport and its rank on the World Bank’s Ease of Doing Business Index shows that countries whose citizens can travel unhindered to across borders have more vibrant economies.

    Singapore which is second on the Ease of Doing Business has the strongest passport. New Zealand, which tops the Ease of Doing Business index is among the top ten on the Henley Passport Index. A similar trend can be spotted on the other end of the spectrum. Countries which do not have visa-free-access to a large part of the globe find themselves beyond the ambit of global capital flows. India is 77th on the Ease of Doing Business Index and 86th on the Henley Passport Index.

    A few notable outliers belie this trend, owing to factors such as favourable tax rates, bounty of natural resources, or sops for large corporations. Georgia and North Macedonia fare exceptionally well in attracting investment, while their passports are relatively weak on the Henley Index. Afghanistan, Iraq, and Somalia fare badly on both counts.


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