After Court Ruling Decriminalizing Homosexuality, Pink Dollar Set to Boost India’s Economy

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In September India’s Supreme Court struck down Section 377 of the penal code and decriminalized homosexuality while advancing fundamental human rights. Prior to the Supreme Court’s ruling LGBT people in India lived under the threat of arrest just for being who they are. In a country of 1.3 billion people, this impacts millions of lives.  In this article we will discuss how the pink dollar and pink economy are set to boost the overall GDP output of the country.

 

There are over 70 countries around the world where LGBT people are criminalized. This status prevents them from fully participating in their community. That also means they cannot fully participate in their economy. LGBT people have the potential to transform the economy they just need the opportunity. Now that India has decriminalized homosexuality the LGBT community can embrace the possibilities before them and be part of their countries future.

 

Criminalization leaves LGBT people vulnerable. A community has very few legal protections when it is viewed as criminal. Landlords, business owners, and government agencies could deny the rights of LGBT people and it would be perfectly legal. Not only does this create a situation of fear and anxiety but it also creates economic instability for an entire community.

 

The cost of homophobia on a  country’s economy was dissected by the World Bank.  “Speaking before a panel of experts and professors in the gender and development fields at the World Bank, Fabrice Houdart, president of World Bank GLOBE, an LGBT resource group for employees at the organization, called discrimination a “significant, self-inflicted economic wound.”  

 

The economic cost of homophobia is between 0.1 of a percent to 1.7 percent of a country’s GDP finds Dr. M. V. Lee Badgett, economics professor at the University of Massachusetts, Amherst. In India, where Badgett conducted a case study, the numbers can be narrowed down to 0.1 to 0.7 percent of GDP.  Her findings are reported in The Economic Cost of Stigma and the Exclusion of LGBT People: A Case Study of India,” which calculates the economic impact of employment discrimination and health disparities for LGBT people on the Indian economy. Measuring the cost of homophobia in India, an economy of $2.6 trillion USD, means discrimination is costing nearly $182 billion dollars which is about half the entire governmental budget of the country.

 

Now that the fundamental human rights of LGBT people have been confirmed LGBT people can realize their full potential when it comes to fostering and supporting the economy. LGBT people can be out and proud in business and as consumers and this can radically change the economic dynamics in India.

 

Yashwinder Singh, Manager of Connect Project at Humsafar Trust in Mumbai said, “Well with decriminalization things have moved ahead, the acceptance at least in institutions and corporations has been initiated. Many are talking about LGBTQ inclusive policies etc. The LGBTQ small businesses, that used to be online and had limited reach, are now ready to step ahead to reach to the next level.  Famous personalities like hotelier Keshav Suri, has taken up the kittu su – India’s first drag disco to all hotel chains in different cities. Other hotel apps like Stay Uncle or Oyo Rooms have included LGBTQ couples in their listings and media have advertisements that reflect LGBTQ people. India is the most populated country and a big market. Community and market analysts both need to focus more to tap this un-tapped population”.  

 

Humsafar Trust is a long standing NGO in Mumbai that promotes LGBT rights. In fact their slogan is “Where your identity is a reason for pride not a reason to hide.” This tagline exemplifies the potential of proudly embracing a community that was once forced to live in the shadows.

 

Senior Economist Erik Lamontagne from the UNAids is very clear in his analysis of global data in his research.  “In simple terms, the more homophobic you are, the more and more it will cost your economy,” Lamontagne said, commenting on the shape of the graph. “If you double the level of homophobia, you don’t double the cost — you more than double the cost.”

 

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The Williams Institute at UCLA collected empirical evidence from 39 countries, 29 of which are emerging economies to map the relationship between LGBT Rights, inclusion and economic development.  Inclusion allows LGBT people to achieve their economic potential when they can get an education and training that improves their productivity and when they are treated equally in the labor market.  The more developed a country is makes it more likely to respect the rights of LGBT people, as LGBT people can ‘freely organize and push for legal changes and public opinion shifts to support greater individual autonomy and minority rights’. The evidence shows that countries with laws that support LGBT equality tend to have higher GDP per capita than less supportive countries.  

 

Decriminalization means that the damage done to the Indian economy can now be repaired and LGBT people can be active participants in their community. They have the chance to create businesses that meet the unique needs of LGBT people. It is also an opportunity for businesses to create a welcoming and supportive environment for LGBT people in the workplace. Marketing can also be transformed. LGBT people and the diversity of the community can be fully represented in marketing. The LGBT experience can be reflected in marketing and advertising while simultaneously promoting a product and LGBT rights. LGBT consumers are much more keen to supports companies that openly embrace LGBT folks.

 

Companies like IBM India, Tata Group and the Royal Bank of Scotland, already support diversity and inclusion efforts to help LGBT employees reach their full potential.  Large multinationals have experience investing in inclusion and see the potential returns of repeating this in India.  That trend is growing. As explained by Parmesh Shahani, who heads the Mumbai-based conglomerate Godrej’s India Culture Lab to Bloomberg, “It’s not just GDP numbers that make you part of the global economy — it’s also these values.”

 

Shahani’s point was also confirmed in the empirical evidence in Williams Institute research.  “The Strategic modernization approach posits that countries hoping to present themselves as more visibly “modern” and successful to potential trading partners might be using LGBT rights strategically as a way to promote and expand economic opportunities.”

 

Tourism is one sector that is already seeing a positive impact from the high visibility of the ruling.  According to the World Travel and Tourism Council, the total contribution of tourism to the economy of southeast Asia was $30.1 billion in 2016.  Over 11 percent of ASEAN’s GDP is created from this sector and employs over 30 million people. Projections show this growing to 15% of GDP. The LGBT Market is estimated at $4.7 trillion USD and Asia’s portion makes up $1.1 trillion , so the domestic tourism potential is significant. In fact, it is larger than the $950 billion estimate for Europe.  Thailand drives innovation and investment to embrace the LGBT sector and has the highest tourist arrival numbers in the region. It has also been a long time partner of IGLTA the LGBT travel association.

 

LGBT people in India are a burgeoning community that needs to be invested in. They are no longer seen as criminals but instead as consumers, business developers, and an integral part of the overall community.  To exist and persist in a country where you are criminalized requires creativity and innovation. Now those cultivated qualities can be applied to the betterment of the LGBT community and India as a whole. Liberty has unlimited potential.

 

The LGBT Foundation is on a mission to use technology and leverage the economic might of the LGBT consumers to win greater equality.