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Overseas Indians sent a record US$ 107 billion in remittances to their relatives back home in 2023-24, surpassing the US$ 100 billion mark for the second consecutive financial year.

According to the Economic Times, remittances by the Indian diaspora, reflected in private transfers in the balance of payments, reached a gross level of US$ 119 billion in FY 2023-24. After accounting for the repatriation of income by private foreign residents and other remittances, net private transfers stand at US$ 107 billion.

This amount is almost double the level of net foreign investments, which totaled US$ 54 billion, including both Foreign Direct Investment (FDI) and portfolio investments.

A post-Covid survey on remittances by the Reserve Bank of India (RBI) highlighted that the United States is the largest source of remittances, contributing 23 percent of the total. In contrast, remittance flows from the Gulf region have declined. 

The bulk of these remittances are directed toward family needs, with a portion also being invested in assets such as deposits, according to an RBI survey.

India continues to be the largest recipient of remittances from its diaspora, as reported in the "Migration and Development Brief" released by the World Bank in December. India has held this top position for over 20 years, driven primarily by the surge of IT professionals migrating to North America and Europe since the 1990s.

The top five remittance recipient countries in 2023 are India (US$ 125 billion), Mexico (US$ 67 billion), China (US$ 50 billion), the Philippines (US$ 40 billion), and Egypt (US$ 24 billion), the Economic Times reported. 

"Remittance flows to developing countries have surpassed the sum of foreign direct investment and official development assistance in recent years, and the gap is increasing," said Dilip Ratha, lead economist and author of the World Bank report.

Based on the trajectory of weaker global economic activity, the growth of remittances to low-and-middle-income countries is expected to soften further to 3.1 percent in 2024. This moderated forecast is driven by slowing economic growth and the prospect of weaker job markets in several high-income countries.