{"id":40455,"date":"2025-04-05T19:02:14","date_gmt":"2025-04-05T13:32:14","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=40455"},"modified":"2025-04-05T19:02:15","modified_gmt":"2025-04-05T13:32:15","slug":"india-getting-more-remittances-from-advanced-economies","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/05-04-2025\/india-getting-more-remittances-from-advanced-economies","title":{"rendered":"India is Getting More Remittances from Advanced Economies"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Findings of the Reserve Bank of India\u2019s (RBI\u2019s) <strong>latest Remittances Survey<\/strong> show a <strong>significant shift in India\u2019s remittance sources.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>India\u2019s Remittances<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India&#8217;s remittances have more than doubled<\/strong> from $55.6 billion in 2010-11 to $118.7 billion in 2023-24.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"dbc59c\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"630\" height=\"393\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/trickle-to-a-flood.png\" alt=\"trickle to a flood\" class=\"not-transparent wp-image-40457\" style=\"--dominant-color: #dbc59c; width:430px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/trickle-to-a-flood.png 630w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/trickle-to-a-flood-300x187.png 300w\" sizes=\"auto, (max-width: 630px) 100vw, 630px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>U.S. and U.K. Contribution:<\/strong> Remittances from the U.S. and U.K. nearly doubled to 40% of total inward remittances in FY24, up from 26% in FY17.\u00a0<\/li>\n\n\n\n<li><strong>U.S. as Leading Contributor:<\/strong> The U.S. became the top source of remittances in FY21, contributing 23.4%. This increased to nearly 28% in FY24.<\/li>\n\n\n\n<li><strong>UAE&#8217;s Role: <\/strong>UAE is still the second-largest remittance source, contributing 19.2%, with Indian migrants in blue-collar jobs like construction, healthcare, hospitality, and tourism.<\/li>\n\n\n\n<li><strong>Singapore&#8217;s Rising Share: <\/strong>Singapore&#8217;s share reached 6.6% in FY24, up from 5.5% in FY17, marking its highest share since then.<\/li>\n\n\n\n<li><strong>State-wise Distribution: <\/strong>Half of the remittances went to Maharashtra, Kerala, and Tamil Nadu. Other states like Haryana, Gujarat, and Punjab had smaller shares (below 5%).<\/li>\n\n\n\n<li><strong>Size of Remittances: <\/strong>Remittances above \u20b95 lakh accounted for 28.6% of total remittances, while 40.6% of the remittances were \u20b916,500 or less.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Shift in Remittance Sources (2023-24):<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Advanced Economies (AEs)<\/strong> now account for over <strong>half of India\u2019s remittances, <\/strong>overtaking <strong>Gulf Cooperation Council (GCC) countries.<\/strong><\/li>\n\n\n\n<li><strong>Key AE contributors:<\/strong> United States, United Kingdom, Singapore, Canada, Australia.<\/li>\n\n\n\n<li><strong>GCC countries&#8217; contribution has declined,<\/strong> partly due to economic downturns and nationalisation policies.<\/li>\n\n\n\n<li><strong>Decline in GCC Remittances:<\/strong>\n<ul class=\"wp-block-list\">\n<li>GCC countries are historically major contributors (Saudi Arabia, UAE, Qatar, Oman, Bahrain, Kuwait).<\/li>\n\n\n\n<li>Impact of Covid-19, job losses, salary cuts, and &#8220;Saudisation&#8221; policies.<\/li>\n\n\n\n<li>UAE share fell from 26.9% (2016-17) to 19.2% (2023-24); Saudi Arabia and Kuwait&#8217;s shares also decreased.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Growth of AE Remittances:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The US remains the largest contributor, accounting for 27.7% in 2023-24 (up from 22.9% in 2016-17).<\/li>\n\n\n\n<li>Other AEs (UK, Canada, Singapore) also showed steady increases in remittance share.<\/li>\n\n\n\n<li>Higher wages and purchasing power in AEs lead to higher per capita remittances.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reasons<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>For Decline in GCC: The economic downturn caused by the Covid-19 pandemic <\/strong>resulted in widespread job losses and salary cuts, reducing the disposable income available for remittances.\n<ul class=\"wp-block-list\">\n<li>Nationalisation\u201d policies \u2014\u00a0 such as the Saudi Nationalisation Scheme or Nitaqat, also known as \u201cSaudisation\u201d \u2014 which prioritise local employment over foreign workers.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Reason for Rise for AEs:<\/strong> They send higher per capita remittances due to higher wages (including a higher minimum wage) and the greater purchasing power of the US dollar..\n<ul class=\"wp-block-list\">\n<li><strong>Impact of Skilled Migration: <\/strong>Increasing number of skilled Indian professionals in STEM, finance, and healthcare sectors in AEs.<\/li>\n\n\n\n<li><strong>Role of Indian Students: <\/strong>The growing number of Indian students abroad contributes to remittances (loan repayments, family support).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Possible Future Trends:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Globally, the <strong>rise of rightwing politics<\/strong> is leading to increasingly restrictive immigration policies in several AEs.\u00a0<\/li>\n\n\n\n<li><strong>This could make it more difficult<\/strong> for <strong>Indian migrants<\/strong> to secure permanent residency, and nudge them to <strong>spread out their financial risk by remitting larger sums home<\/strong> rather than <strong>committing to investments in their host countries<\/strong>.<\/li>\n\n\n\n<li>India is expected to be the<strong> world&#8217;s leading supplier of labor until 2048<\/strong> due to its growing working-age population.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Policy Recommendations:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>To maximise remittance inflows and improve the welfare of migrant workers, India must focus on skill harmonisation at the sending-country level.<\/li>\n\n\n\n<li>Protect low-skilled workers from exploitation and forced deskilling.\n<ul class=\"wp-block-list\">\n<li>Engage in bilateral and multilateral agreements to regulate migration and secure better opportunities for Indian workers.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>By proactively engaging with destination countries to establish such agreements, India can secure better opportunities for its workforce, while also ensuring a steady flow of remittances.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Remittance<\/strong><br>&#8211; <strong>Remittances <\/strong>are a way to electronically send funds to people, often family, in another country.<br>1. Usually sent by individuals working in foreign countries, especially those employed in blue-collar or skilled jobs.<br>&#8211; <strong>Impact:<\/strong> Remittances are a significant source of income for many countries, contributing to their economic stability, supporting local economies, and sometimes helping to finance national trade deficits.<br>&#8211; <strong>Modes of Transfer:<\/strong> Remittances can be sent through banks, money transfer operators, or digital platforms.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/why-india-is-getting-more-remittances-from-advanced-economies-than-the-gulf-9925685\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Findings of the Reserve Bank of India\u2019s (RBI\u2019s) latest Remittances Survey show a significant shift in India\u2019s remittance sources.<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-40455","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/40455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=40455"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/40455\/revisions"}],"predecessor-version":[{"id":40458,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/40455\/revisions\/40458"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=40455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=40455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=40455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}