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Context:
Inward remittances to India have more than doubled from $55.6 billion in FY2011 to $118.7 billion in FY2024. Advanced economies (AEs) including the US, UK, Singapore, Canada, and Australia accounted for 51.2% of total remittances in FY24, after 34.2% in FY21. This surge highlights a clear shift in migration patterns towards a skilled Indian diaspora working in advanced economies.
Declining Share from Gulf Countries
- The Gulf Cooperation Council (GCC) countries UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain contributed 38% of India’s remittances in FY24, down from 50.2% in FY21.
- It is clear from this shift that, even though the GCC region remains important, its hold is slowly being replaced by the remittances coming out of the high income, skilled migration destinations.
Comparative Data on Remittance Sources
| Source | FY21 Share (%) | FY24 Share (%) |
|---|---|---|
| Advanced Economies (US, UK, Singapore, Canada, Australia*) | 34.2% | 51.2% |
| GCC Countries (UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain) | 50.2% | 38% |
Reasons Behind the Shift
- The increase in skilled professional migration to advanced economies (especially IT, healthcare, and finance).
- States such as Canada and Australia have relaxed entry restrictions regarding long term migration.
- Gradual decline in the number of low skilled labor exports to GCC countries with an onward shift in the economic diversification of those countries.
- Greater value adding jobs and salaries in the US, UK, and Singapore have contributed to higher per capita remittances.
Future Prospects
- Such global conditions will give further momentum to India’s rising inward remittances:
- Global demand for skilled professionals.
- Stronger Indian diaspora presence in high income countries.
- A depreciating rupee, increasing the economic incentives to send money to India.
- The share of AEs would further increase, while GCC contributions would either stabilize or decline. Localization efforts and economic transitions in those countries will bring this.
