Indian migrants sent nearly $70bn back to the country in 2017, more than anyone else
- India recorded $69 billion in
remittanceinflows in 2017, a 10% jump from 2016, according to the World Bank.
- China and Philippines came second and third, with $64 billion and $33 billion in inflows, respectively.
- While higher remittances might be a cause for celebration, India is also experiencing an unprecedented levels of outflows from
Keeping this in mind, it isn’t exactly a surprise that India also receives the highest amount of remittances in the world, i.e, money sent back home by Indian immigrants. According to a recent report by the World Bank, India recorded $69 billion in remittance
Meanwhile, India’s neighbour China, which has 10 million migrants abroad, came in second place, receiving $63.9 billion in remittances. Philippines came third, with $33 billion in inflows.
The entire South Asian region as a whole received $117 billion in remittances. At 5.2%, the region has the lowest transaction costs for remittance inflows in the world, compared to a global average of 7.1%.
A large number of Indian migrants are employed in the Gulf region. The UN report said that 8.9 million Indian migrants lived in the Gulf region, lead by the UAE and Saudi Arabia, with 3.3 million and 2.3 million workers, respectively. This explains why there was a drop in remittance inflows to India in 2015 and 2016 and a corresponding increase last year. As oil prices declined, the ensuing decline in economic growth and liquidity crunch in the Middle East resulted in lower earnings for migrant workers. The reverse is true when they rise.
So, even as rising oil prices contribute to widening current account deficit in India, there is an unintended positive side effect- higher remittances. However, it bears mentioning that India’s remittance outflows also rose a staggering 15% to $5.7 billion last year - most of which was sent back home by migrants from Bangladesh.
This, coupled, with the fact that Indian residents are sending an unprecedented amount of money abroad under the Reserve Bank of India’s Liberalised Remittance Scheme, should be a cause of concern for government officials monitoring the country’s balance of payments.