Unprecedented India has maintained its position as the largest recipient of global remittances, with a remarkable 12.3% surge in inward flow to $125 billion in 2023. This reflects the significant role played by the Indian diaspora in supporting families and contributing to the country’s economic resilience.
Key Figures and Trends
- The United States remains the primary source country for remittances.
- GCC countries, such as the UAE and Saudi Arabia, continue to be major contributors to remittances in 2023.
- The World Bank’s Migration and Development Brief reports a 3.8% growth in remittance flows to low- and middle-income countries (LMICs), reaching $669 billion.
Regional Dynamics: Unprecedented
- South Asia, led by India, maintains its position as the top recipient region.
- The Middle East and North Africa witness a decline in remittance flows for the second consecutive year, primarily due to reduced flows to Egypt.
Top Five Remittance Recipient Countries in 2023
- India – $125 billion
- Mexico – $67 billion
- China – $50 billion
- Philippines – $40 billion
- Egypt – $24 billion
Comparative Analysis with 2022: Unprecedented
- In 2022, the top five recipient countries were India, Mexico, China, the Philippines, and Pakistan.
- India received $111 billion in remittances in 2022.
Foreign Sources of Remittances to India (Fiscal Year 2021-22)
- The US – 23.4%
- UAE – 18%
- UK – 6.8%
- Saudi Arabia – 5.1%
- Additional contributors include Kuwait, Oman, and Qatar.
Challenges and Remittance Costs
- Remittance costs remain high, averaging 6.2% to send $200 as of Q2 2023.
- Banks are identified as the costliest channel for sending remittances, with an average cost of 12.1%.
Future Outlook and Concluding Insights: Unprecedented
- Remittances surpass foreign direct investment and official development assistance, creating opportunities for private capital mobilization.
- Weaker global economic activity is expected to soften remittance growth to LMICs to 3.1% in 2024.
Conclusion:
India’s continued prominence in global remittances underscores the vital role of the Indian diaspora in supporting the nation’s economy. The report emphasizes the importance of inclusive labour markets and social protection policies to sustain remittance flows, serving as critical lifelines for developing countries like India.
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