Remittances to India reach a new
high of $100 Billion

In its latest report months ago, the Organisation for Economic Cooperation and Development (OECD) projected India as one of the fastest-growing economies amid a global slowdown triggered by an enormous energy shock from the ongoing Russia-Ukraine conflict.

The Paris-based intergovernmental body - OECD, which focuses on economic policy reports, said India is set to be the second-fastest growing economy in the G20 in FY 2022-23 after Saudi Arabia. The statement comes despite most countries tightening monetary policy to manage inflationary pressures.

In addition, the more good news is coming for India's Economic Outlook. Excellent growth in remittances in 2022 is the surge of inflows into India, which grew from $89.2 billion in 2021 to $100 billion in 2022, a rise of around 12%. It is a significant gain, as the general expectations were that the pandemic and the slow global growth would badly hit India's remittances.

India will continue to top the rankings of the poor and middle-income countries with the most significant remittances. The other countries with the largest remittances are Mexico ($60 billion), the Philippines ($38 billion), China ($51 billion), and Egypt ($32 billion). India's remittance growth is remarkable as it has consistently garnered roughly a tenth of the global remittances in the last few years. An important reason for the surge in remittances to India is the strengthening of the labor markets in the United States and other advanced economies like Canada and the UK, which have bolstered wage incomes. The deduction of the cost of sending remittances has also encouraged transfers through formal channels.

The ongoing structural shift in the skill arrangement and geographical flow of migrants has also strengthened remittances. The flow of low-skilled migrant workers working in the informal or formal sector in the Gulf Cooperation Council (GCC) countries such as Saudi Arabia, UAE, Qatar, and Kuwait has slowly been overtaken by the migration of high-skilled workers to developed economies like the US, Canada and the United Kingdom (UK), who jointly now account for a fifth of the total Indian migrants. The United Arab Emirates (UAE), the US, and Saudi Arabia now account for almost half the non-resident Indians (NRIs).

India has steadily stayed the largest source of international Skilled and Non Skilled migration, potentially enlarging its capacity to boost remittances further. Similarly, the shift in migration flows to skilled white-collar jobs in advanced countries also helps improve prospects for further increase in remittances in the coming years and strengthening India's Economy.