Remittances to India Rise from Advanced Economies: RBI Bulletin
Mumbai, Mar 19 (PTI) – A recent bulletin from the Reserve Bank of India (RBI) indicates a significant change in the flow of remittances to India. For the year 2023-24, remittances from advanced countries like the United States and the United Kingdom have outpaced those from Gulf nations, highlighting a new trend among skilled Indian migrants.
The total remittances to India have increased dramatically, jumping from USD 55.6 billion in 2010-11 to USD 118.7 billion in 2023-24. These remittances play a crucial role in supporting India’s economy, helping to cover nearly half of the country’s merchandise trade deficit and serving as a buffer against global economic challenges.
An article titled “Changing Dynamics of India’s Remittances” published in the RBI’s bulletin describes various aspects of these inward remittances, including the sources and destinations, as well as the transaction sizes and methods of sending money.
According to the data, the number of Indian migrants living abroad has tripled from 6.6 million in 1990 to 18.5 million in 2024, increasing India’s share of global migrants from 4.3% to over 6%. Notably, around half of the Indian migrants are located in Gulf Cooperation Council (GCC) countries.
Over the years, advanced economies have become increasingly important sources of remittances. The report mentions that as India’s working-age population is predicted to grow until 2048, the country is expected to become the largest source of labor in the world.
The survey results indicate a notable shift in the sources of remittances, with countries like the US, UK, Singapore, Canada, and Australia contributing significantly—together accounting for more than half of the total remittances in 2023-24.
The survey, which tracked remittances for 2023-24, involved 30 banks, covering nearly all the incoming remittances related to family support and savings. It also included two major money transfer operators and two fintech companies in the remittance market.
In this period, the US remained the top source of remittances to India, with its share rising to 27.7% from 23.4% in the previous period. The UK’s contribution also saw an increase, climbing to 10.8% from 6.8%.
Meanwhile, the United Arab Emirates (UAE) is still the second-largest source, with its share rising to 19.2% from 18% earlier. The UAE is known for its large workforce of Indian migrants, particularly in blue-collar sectors like construction, healthcare, and hospitality. In contrast, Indian migrants in the US are often employed in white-collar jobs.
State-wise, Maharashtra received the largest share of inward remittances at 20.5%, though this is down from 35.2% in 2020-21. Kerala came next, with remittances increasing significantly from about 10% to 19.7%. Other states like Tamil Nadu, Telangana, and Karnataka also contributed notable shares.
Additionally, Maharashtra, Telangana, and Punjab are prominent regions from which many Indian students migrate abroad for education, often staying abroad for better job prospects, which is evident in the rising remittances from these states.
In terms of transaction sizes, remittances exceeding Rs 5 lakh represented the largest share, accounting for around 29% in 2023-24.
The report’s authors are from the Department of Economic and Policy Research at the Reserve Bank of India, though the views expressed are their own and do not necessarily reflect those of the central bank.
