Changing Dynamics of India’s Remittances – FY24
Context
- India continues to be the world’s top recipient of remittances, with $129–135 billion inflows in FY24.
- For the first time in recent years, advanced economies (U.S., U.K., etc.) surpassed Gulf nations as the primary sources of remittances.
- This shift reflects changes in migration patterns, employment composition, and education-driven migration.
1. Source Country Trends
- United States: Largest contributor, 27.7% of total remittances, up from 23.4% in FY21.
- United Kingdom: Contribution increased from 3% (FY17) to 10.8% (FY24).
- Combined U.S. + U.K. share nearly doubled to 40% of total remittances.
- Gulf countries (UAE, Saudi Arabia):Traditional contributors; share declined:
- UAE: 27% → 19.2% (FY17 → FY24)
- Saudi Arabia: 11.6% → 6.7%
- Other notable contributors:
- Singapore: 6.6% (highest since FY17)
- Australia: 2.3% (new addition)
Implication: There is a structural shift from blue-collar Gulf remittances to white-collar and education-driven inflows from advanced economies.
2. Migration and Remittance Drivers
- Rise in skilled Indian workforce in U.S. and U.K.
- Higher education migration to Canada, Australia, U.K., and Singapore → increased remittance inflows.
- Employment composition:
- U.S. & U.K.: Skilled, white-collar → higher per capita remittance
- GCC: Predominantly blue-collar → relatively lower per capita remittance
3. Geographic Distribution within India
- Top recipient states: Maharashtra, Kerala, Tamil Nadu (≈50% of inflows).
- Other states: Haryana, Gujarat, Punjab — each <5% of total inward remittances.
- Size distribution:
- ₹5 lakh+ transfers: 28.6% of total
- ₹16,500 or less: 40.6% of total
4. Economic Significance
- Stable non-debt financing: Supports current account and foreign exchange reserves.
- Household support: Funds family maintenance, education, healthcare.
- Macroeconomic resilience: Acts as a buffer during global crises (e.g., pandemic, inflation).
- Complement to FDI & services exports: Together, these account for >40% of gross current account inflows.
Updated - March 19, 2025 10:44 pm | The Hindu