INDIA’S REMITTANCES TRENDS
- Growth in Remittances: India’s total remittances have more than doubled from USD 55.6 billion in 2010-11 to USD 118.7 billion in 2023-24.
- Shift in Source Countries: Advanced Economies (AEs), especially the US and UK, now lead as top contributors, overtaking Gulf Cooperation Council (GCC) countries.
- State-wise Distribution: Maharashtra and Kerala are the top recipients of remittances, with Tamil Nadu, Telangana, and Karnataka following closely.
- Digital Remittances: Digital platforms are on the rise, with 73.5% of total remittances transferred digitally in 2023-24.
KEY FINDINGS FROM 6TH ROUND OF SURVEY (2023-24)
- Remittance Sources:
- United States (US): Leading source, contributing 27.7% of total remittances in 2023-24.
- United Arab Emirates (UAE): Second at 19.2%.
- Other Advanced Economies: Including the UK, Canada, Australia, and Singapore, contribute over 50% of total remittances.
- The UK’s share rose from 3.4% in 2016-17 to 10.8% in 2023-24, driven by increased migration.
- Gulf Cooperation Council (GCC) Decline:
- The overall share of GCC countries (UAE, Saudi Arabia, Qatar, etc.) decreased from 47% in 2016-17 to 38% in 2023-24.
- State-wise Distribution:
- Maharashtra (20.5%) remains the top recipient, followed by Kerala (19.7%).
- Rising trends in states like Punjab and Haryana are observed.
- Mode of Remittances:
- Rupee Drawing Arrangement (RDA) remains the dominant channel.
- Digital remittances account for 73.5% of all transactions.
REASONS FOR SHIFT IN REMITTANCES
- Stronger Job Markets in AEs:
- The US, UK, Canada, and Australia offer high-paying opportunities, especially for skilled Indian workers.
- Post-Covid, the US job market revived, leading to an increase in remittances.
- UK-India Migration Partnership made it easier for Indians to get work visas, significantly boosting migration from 76,000 in 2020 to 250,000 in 2023.
- Declining Job Opportunities in GCC:
- Many migrants moved from the Gulf to AEs for better financial opportunities post-Covid.
- Economic diversification and nationalization policies (Nitaqat in Saudi Arabia and Emiratization in UAE) reduced the demand for low-skilled labor in the Gulf.
- Changing Migration Patterns:
- Southern states like Kerala, Tamil Nadu, Andhra Pradesh, and Telangana increasingly prefer AEs over the Gulf.
- States like Uttar Pradesh, Bihar, and Rajasthan continue to send migrants to the Gulf, though their lower educational attainment limits eligibility for skilled jobs in AEs.
- Rise in Education-Driven Migration:
- Increasing numbers of Indian students abroad, especially in Canada (32%), US (25.3%), and UK (13.9%), are sending remittances after completing their studies and securing jobs.
REMITTANCES AS PART OF BoP
Balance of Payments: Remittances are considered unilateral transfers under the current account, contributing to foreign income inflows without creating liabilities.
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