In the financial year 2023-24, Indians residing abroad sent an unprecedented $107 billion in remittances to their families in India, surpassing the $100 billion threshold for the second consecutive year, according to a report. This amount of net remittances nearly doubles the combined total of $54 billion from foreign direct investments (FDI) and portfolio investments during the same period.
According to the balance of payments data, remittances from the Indian diaspora, categorised as private transfers, reached a gross figure of $119 billion in FY24. Recent global studies and domestic research highlight a correlation between remittances and migration levels in different economies, as well as the employment conditions in countries of origin. The cost associated with remitting funds is also recognised as a significant factor influencing the volume of overseas remittances.
US is the largest source of remittances
According to a survey by the Reserve Bank of India on post-Covid-19 remittances, the United States emerged as the primary contributor, constituting 23 per cent of the total amount. Additionally, remittances from the Gulf region experienced a decline during this period. The majority of these funds are intended for familial support, with a portion also allocated to investments such as deposits, according to the RBI’s findings on remittances.
In 2023, the United States remained the largest contributor to remittances globally. The leading recipients of these funds were India ($125 bn), followed by Mexico ($67 bn), China ($50 bn), the Philippines ($40 bn), and Egypt ($24 bn).
In December, the World Bank’s "Migration and Development Brief" showed that India continues to lead globally in receiving remittances from its diaspora. This trend has persisted for over two decades, driven largely by the migration of IT professionals to North America and Europe since the 1990s.
The report quoted Dilip Ratha, lead economist and principal author of the World Bank report as saying that remittance flows to developing nations have outpaced foreign direct investment and official development assistance in recent years. This trend is expected to continue widening, he said.
