What are current trends in inward remittances in India?

July 21, 2022

India recently became the largest recipient of remittances worldwide. As per World Bank, it received USD 87 billion in 2021, accounting for a growth of 4.6%. India is followed by China and Mexico, each accounting for USD 53 billion remittances.

If we were to talk about current trends in India’s inward remittances

In India, the overall inward remittances remained adaptable during the pandemic situation.
However, there can be witnessed a big shift now.
As per survey of central bank, share of remittances from Gulf Cooperation Council (GCC), inward remittances in India have decreased from over 50% in 2016- 17 to 30 per cent in 2020- 21.
Remittances from Gulf countries to India declines due to migration from India to GCC region, strict labour laws, high work permit renewal fees, slow-moving oil prices, and taxes.
Share of Kerala, Tamil Nadu and Karnataka has reduced to half in 2020-2021. Earlier, these states were dominating in GCC region and were big contributors in terms of remittance. These states now account for 25% of total remittances since 2016-17.
Maharashtra has become the largest recipient state, leaving behind Kerala.

Advanced economies have emerged as big sources of remittances to India, in the midst of steady migration of skilled workers. The US, the UK and Singapore accounts for 36% of total remittances in 2020-21. The US, with 23% of total remittances, left behind the UAE as top source of remittances to India. According to World Bank, economic recovery in the US was an important factor of India’s remittances growth.

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