Context : Key Findings from RBI’s Report
- A shift in remittance sources has been observed in the past four years.
- Developed economies (U.S. & U.K.) have replaced Gulf nations as the top contributors of remittances to India.
- RBI’s Sixth Round of India’s Remittances Survey (March 2024) highlights this transformation.
Relevance : GS 2(International Relations) , GS 3(Remittance)
Rise of the U.S. & U.K.
- Share of U.S. & U.K. remittances increased from 26% in FY17 to 40% in FY24.
- The U.S. alone contributed nearly 28% in FY24, up from 23.4% in FY21.
- The U.K.’s share surged from 3% in FY17 to 10.8% in FY24.
- The shift is attributed to the rising share of Indian professionals and skilled workers in these countries.
Decline in Gulf Contributions
- UAE’s share dropped from 27% (FY17) to 19.2% (FY24).
- Saudi Arabia’s contribution nearly halved, falling from 11.6% (FY17) to 6.7% (FY24).
- This decline suggests stagnation in remittances from traditional sources like the Gulf.
Reasons Behind the Shift
- Increased migration of Indian professionals to high-paying sectors in developed economies.
- Slower wage growth & economic shifts in Gulf nations affecting remittance flows.
- More Indians in white-collar jobs abroad leading to higher per capita remittances.
Key Takeaways
- The remittance pattern highlights India’s changing migration trends.
- Developed nations now drive remittance growth, reducing dependence on Gulf economies.
- This trend may impact India’s foreign exchange inflows & economic planning in the long run.
