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India remittances from US, UK surpass those from Gulf: RBI
Total remittance inflows to India reached $118.7 billion in 2023-24, more than doubling from $55.6 billion in 2010-11.
FILE PHOTO: A police officer walks past the Reserve Bank of India (RBI) logo inside its headquarters in Mumbai, India, April 6, 2023. / REUTERS/Francis Mascarenhas
India’s remittance landscape has undergone a significant shift, with inflows from advanced economies (AEs), including the United States and the United Kingdom, surpassing those from Gulf nations in 2023-24.
According to the Reserve Bank of India’s (RBI) March bulletin, India’s inward remittances, which traditionally came largely from GCC countries, were now coming from the US, the UK, Singapore, Canada and Australia.
"The results of the survey highlight the gradual shift in dominance of India’s remittances from the GCC countries to the AEs, particularly the US, the UK, Singapore, Canada, and Australia, which together accounted for more than half of the remittances in 2023-24," the bulletin stated.
Top remittance receiving countries / RBI March BulletinIt attributed this shift to a change in migration patterns, reflecting a rise in skilled Indian workers abroad.
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US leads as top remittance source
The United States overtook UAE as the largest source of remittances to India, with its share rising to 27.7 percent in 2023-24 from 23.4 percent in 2020-21.
Meanwhile, the UAE continued to be the second-largest remittance source for India, with its share increasing from 18 percent in 2020-21 to 19.2 percent in 2023-24.
The report attributed this to the contrasting nature of migration patterns in different regions. "UAE is the largest hub for Indian migrant workers engaged primarily in blue-collar jobs, dominated by the construction industry, followed by healthcare, hospitality, and tourism. This is in stark contrast to the US, where Indian migrants are mainly employed in white-collar jobs.”
The UK’s contribution also grew to 10.8 percent from 6.8 percent during the same period.
India’s remittance doubled since 2010
Total remittance inflows to India reached $118.7 billion in 2023-24, more than doubling from $55.6 billion in 2010-11.
"Net remittance receipts have played a crucial role in absorbing external shocks and financing around half of India’s merchandise trade deficit," the bulletin noted.
Maharashtra leading recipient
Maharashtra received the largest share of remittances at 20.5 percent in 2023-24, although lower than 35.2 percent in 2020-21.
Kerala followed closely, with its share increasing to 19.7 percent from about 10 percent, followed by Tamil Nadu (10.4 percent), Telangana (8.1 percent), and Karnataka (7.7 percent).
The bulletin noted that Maharashtra, Telangana, and Punjab accounted for a significant share of Indian students migrating abroad for education and staying back for employment, contributing to the changing remittance patterns.
Growth of digital remittances
The report highlighted the increasing shift towards digital transactions. In 2023-24, an average of 73.5 percent of total remittances through money transfer operators (MTOs) were processed digitally. "The interlinking of cross-border fast payment systems may increase the ease and efficiency of such transactions," the bulletin noted.
Transaction sizes and cost of remittances
Remittances above $6,000 (₹5 lakh) had the highest share, accounting for around 29 percent of total transactions in 2023-24.
The bulletin also analyzed the cost of remittances, stating that while the global average cost of sending $200 stood at 6.65 percent in Q2 2024, India’s cost was lower at 4.9 percent in 2023, meeting the initial G20 target of 5 percent.
Remittances outpacing FDI
The bulletin further highlighted that India’s remittance inflows have consistently outpaced its gross inward Foreign Direct Investment (FDI) since the early 2000s, reinforcing remittances as a stable source of foreign earnings.
The survey covered 30 authorized dealer (AD) banks, two major money transfer operators, and two fintech companies, capturing around 99 percent of total inward remittances reported under family maintenance and savings.
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