• Sunday, July 21, 2024
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Indian diaspora remittances crosses $100bn in one year

India pulls highest-denomination notes from circulation

Indians overseas sent a record $107 billion in remittances to their relatives back home between 2023 and 2024, higher than the projected $100 billion, the Economic Times reports.

The net remittances boosts are almost double the combined net foreign direct and portfolio investments – FDI and FPI of $54 billion during the year.

According to the report, remittances by the Indian diaspora, as reflected in private transfers in the balance of payments, touched a gross level of $119 billion in FY’2023-24.

However, having factored in repatriation of income by private foreign residents and other remittances, net private transfers stood at $107 billion.

Many studies have indicated that remittances are linked to the level of migration in different economies and the job opportunities and situation in the source countries.

For instance, a study by the Reserve Bank of India, RBI, revealed that the United States is the largest source of diaspora remittances, accounting for 23% of the total inflows while capital flows from the Gulf region slowed.

In another survey by the country’s monetary authority, it showed that a larger chunk of the migrant transfers went towards family needs while some portions are invested into other assets like deposits.

While the United States remains the top source of remittances, India continues to be the largest recipient of the remittances from its diaspora, a World Bank report “Migration and Development Brief” showed.

India has been the largest recipient of remittances by its diaspora for over 20 years buoyed by the surge in IT professionals going to North America and Europe from the nineties.

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

“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 lead author of the World Bank report.