Remittances are a significant source of funds for any economy and India has climbed to a seemingly unassailable position in foreign remittances. For the second year running, Indians have sent home far more money than any other nation in the world.
According to a recently published report Indians sent back $107 billion in foreign remittances in 2023-24, which not only placed it ahead of all other countries but recorded a mop-up of well in excess of $100 billion that no country has ever done once.
India eclipses China and Mexico combined
According to World Bank data, in 2023, while India grabbed the top slot with $125 billion, Mexico came a poor second with $67 billion, a mere 53% of what Indians did.
China stood at $50 billion, only 40% of that of India. The Philippines clocked $40 billion and Egypt came fifth with $24 billion.
Thus, the inflow into India in 2023 was more than the cumulative inflows into Mexico and China.
Incidentally, the amount of remittances that India got in 2023 was more than the GDP of 116 countries in 2022.
In 2020, too, India was the leader on this count having attracted $83.15 billion compared to $59.51 billion of second-placed China.
Four states in focus
Interestingly, the destination of remittances is not evenly spread out throughout the country. Data suggest that well over 55% of the remittances are accounted for by only four states such as Kerala, Maharashtra, Tamil Nadu and Karnataka.
The implication: residents of these states send a lot of money to their families who live here.
Much of this huge inflow of remittances are attributable to Indians working in countries such the United States, the UK, the UAE, Saudi Arabia, and countries in West Asia. But the US is the biggest source of remittances in India.
Some remittances also come from Indian students studying abroad and Indian diaspora communities worldwide.
Significance of remittances
Remittances play a significant role in any country’s economy. It not only acts as a significant and steady source of foreign exchange but also supports consumption in the domestic economy.
It also boosts savings and investment, which, in turn, triggers economic activity in the economy. Often vital needs of many families on education, and healthcare are taken care of by remittances. These also directly boost these sectors in the domestic economy by expanding the market.
In 2019, India received about $83 billion in remittances, which gave it the top spot as a remittance-receiving country.
The UN World Migration Report has stated that in 2022, as much as $111 billion of remittances flowed into India, putting it at the top of the league of nations. In comparison, Mexico was second with $61.1 billion, China came third with $51 billion, the Philippines was at the fourth spot with $38.05 billion and France came fifth at $30.04 billion.
The UN report attributed this heavy flow into India substantially to the large number of migrant workers who spread out into the world.
India has traditionally been a world-beater in foreign remittances, thanks to the huge Indian diaspora all over the world. But do you know which four states account for more than half of the huge flow that exceeded $100 billion for the second consecutive year. Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
