In 2022, world-topping $100 billion in remittances have come to India

Migrant workers from India are on track to send home a record amount of money this year, boosting the finances of Asia’s third largest economy poised to retain its spot as the world’s top recipient of remittances.

Remittance flows to India will rise 12 per cent to reach $100 billion this year, according to a World Bank report published on Wednesday. That puts its inflows far ahead of countries including Mexico, China and the Philippines.

Highly-skilled Indian migrants living in wealthy nations such as the US, the UK and Singapore were sending more money home, the report said. Over the years, Indians have moved away from doing lower paid work in places like the Gulf. Wage hikes, record-high employment and a weaken­ing rupee also supported growth.

Inflows from the world’s largest diaspora are a key source of cash for India, which lost almost $100 billion of foreign exchange reserves in the past year amid tightening global conditions that weakened currencies including the rupee against the dollar. Remittances, accounting for nearly 3 per cent of India’s GDP, are also important for filling fiscal gaps. 

Cash transfers to India from high-income countries climbed to more than 36 per cent in 2020-21, up from 26 per cent in 2016-17. The share from five Gulf nations, including Saudi Arabia and the UAE, declined to 28 per cent from 54 per cent, the World Bank said, citing Reserve Bank of India data.

Remittances earned by mig­rants from Bangladesh, Pakis­tan and Sri Lanka are expected to drop this year, the World Bank noted. “Migrants responded to exchange rate depreciations in home countries by sending less money through formal channels and opting for black-market premia in the parallel exchange markets,” the report said.