From the first oil boom in the 1970s, money sent from workers in West Asia has been a key source of dollars for India. In FY15, inward remittances were as big as IT exports and about 45 per cent of the trade deficit. Lower crude oil prices would impact inflows, as oil exporters adjust their economies to lower oil revenues.
For the first time in 20 years, forex reserves of the top three oil exporters dipped in 2015. Remittances to India were stagnant in FY14 and FY15, in line with lower oil prices. Lower inflows would exert pressure on the current account deficit and the rupee.