The question is what is the reason behind it? What stops it? Whats so special about India? How is India SO VASTLY different than Pakistan in this matter? I can not see any reason other than simple and stupid ego and jealousy masquerading as security concerns. And honestly, if India did HALF of things right that west did, it would come out much better than what it is right now.
China once was adamant that capitalistic market based economy was a curse from west. It led to 60 million deaths in cultural revolution. Then they learnt from that mistake and went for controlled market based economy and never turned back. Upshot is, decisions taken in pure ego and jealousy with no basis in reality are often stupid. "We do not need to blindly follow west" is a stupid thinking. You need to follow wisely what is good for you. Above all ask the questions about ideological decisions.
Remittance will also not go up. A 50-100 billion extra investment and remittance can cover for India's chronic balance of payment issue. Actually, remittance to GDP ratio is NOT a proper metric. What is proper is remittance to export ratio. India's exports have been falling for quite sometime now. Increasing remittance and investment opportunities from diaspora can help cover that.
And NO FDI is NOT similar to remittance. FDI is mostly directed towards institutional and business investors and not diaspora. Diaspora can be a totally separate channel.
India received USD 339.55 billion in FDI over last 5 years (
https://economictimes.indiatimes.co...-fdi-in-last-5-years/articleshow/89457741.cms). India got 394 billion in remittance in the last 5 years. It could actually get above 600 billion dollars in remittance easily by having more diaspora friendly policies. So yes, remittance for India has been bigger source of forex than FDI.
Actually, in India, we do not have dual nationality yet massive amount of money has been stowed away by politicians in off shore accounts. It was a key Modi promise to bring it back. Sadly we all know how it goes. Not much returned to India.