- In 2023, India will have the greatest remittance inflows in the world, totalling USD 125 billion.
- Several reasons contributed to the increase, including India’s currency deal with the UAE.
The World Bank’s Remittance Growth
- Report Analysis: According to the World Bank analysis, remittance growth in India would drop to 12.4% in 2023, down from 24.4% in 2022.
- Increased South Asian Market Share: From 63% in 2022, India’s proportion of South Asian remittances is predicted to rise to 66% in 2023.
Global Remittance Scenario
- Other Leading Countries in the Global Remittance Scenario: Mexico (USD 67 billion), China (USD 50 billion), the Philippines (USD 40 billion), and Egypt (USD 24 billion) are the leading remittance-receiving countries after India.
- Remittances contribute significantly to GDP in countries such as Tajikistan, Tonga, Samoa, Lebanon, and Nicaragua, demonstrating their essential economic relevance.
Factors Influencing India
- Key Motivators: In high-income countries, falling inflation and healthy labour markets contributed to rising remittances.
- Significant remittance flows came from the United States, the United Kingdom, and Singapore, as well as the Gulf Cooperation Council, particularly the UAE.
- The UAE’s Role: With 18% of overall remittances to India, the UAE is the second-largest supplier of remittances.
Impact of India-UAE Currency
- Agreement on February 2023 Agreement: The agreement to promote the use of local currency in cross-border transactions and to interconnect payment networks has increased remittances.
- The use of dirhams and rupees in transactions is intended to direct more remittances through formal channels.
Trends in Global Remittances
- Low- and middle-income countries’ growth: Remittances to these nations are expected to increase by 3.8% in 2023.
- Future Concerns: Due to global inflation and low economic expectations, migrants’ actual income may fall in 2024.
Source: https://www.thehindubusinessline.com/economy/india-leads-global-remittance-charts-with-usd-125-billion-in-2023-world-bank-report/article67649834.ece