Remittances from West Asia hit in FY21 due to Covid-19 pandemic

According to an RBI survey, Indians in advanced nations, like the US & UK, emerged important sources of money

The money sent home by Indians from West Asian countries took a beating in 2020-21 due to the pandemic. On the other hand, overseas Indians in advanced nations — the United States, United Kingdom and Singapore — emerged as important sources of remittance, according to a Reserve Bank of India (RBI) survey.

Indians working in informal sectors in West Asia seem to have been impacted the most due to the lockdowns and subdued crude oil prices as well as slower pace of migration in recent years.

The stressed income conditions are discernible from the small-size transactions gaining share in total remittances during the pandemic, said the survey. The article was written by officials in the department of economic and policy research, RBI.

The article, in RBI’s July 2022 bulletin, is based on the fifth round of the Survey on Remittances for the year FY21.
 

The share of remittances from the GCC (Gulf Cooperation Council) region is estimated to have declined from more than 50 per cent in 2016-17 to about 30 per cent in 2020-21.

The share of advanced economies accounted for 36 per cent of the total payments in 2020-21. The US surpassed the UAE as the top source country, accounting for 23 per cent of total remittances in 2020-21.

Notwithstanding the headwinds of Covid, India’s inward remittances have proven to be a resilient source of current account receipts. Despite a sharp decline in remittances to Maharashtra in 2020- 21, it has emerged as the top recipient state along with Delhi. The traditional states of Kerala and Tamil Nadu have witnessed gradual decline in remittances in recent years.