World Bank Report: India received $120 billion in remittances in 2023
PTC News Desk: India received $120 billion in remittances in 2023, nearly doubling Mexico's $66 billion during the same period, according to a World Bank report released on Wednesday. The report highlighted that China ($50 billion), the Philippines ($39 billion), and Pakistan ($27 billion) also ranked among the top five recipients of remittances globally for the year. This surge in remittance inflows follows a period of robust growth observed between 2021 and 2022, amounting to a global total of approximately $656 billion.
The World Bank attributed India's substantial remittance growth to several factors, including reduced inflation, strong labor markets in the United States (the largest destination for Indian skilled migrants) and other OECD countries, and increased demand for skilled and unskilled workers in the Gulf Cooperation Council (GCC) nations. In contrast, Pakistan experienced a 12% decline in remittances to $27 billion in 2023, primarily due to internal economic challenges and a balance of payments crisis.
India's remittance receipts from the United Arab Emirates (UAE), which constitute 18% of the total and rank second after the US, were bolstered by a bilateral agreement in February 2023. This agreement promoted the use of local currencies for cross-border transactions and facilitated cooperation in payment systems between India and the UAE, enhancing the formalization of remittance channels. Additionally, Saudi Arabia, Kuwait, Oman, and Qatar contributed 11% to India's total remittances.
Looking ahead, the World Bank forecasts a 3.7% increase in remittances to India, reaching $124 billion in 2024, followed by a 4% rise to $129 billion in 2025. Efforts to integrate India's Unified Payments Interface with source countries like the UAE and Singapore aim to further streamline remittance processes and reduce associated costs.
The report emphasised the crucial role of remittances in economic and human development, citing their resilience in supporting millions of households amidst global economic uncertainties. It advocated for leveraging remittances to enhance financial inclusion and access to capital markets, thereby promoting sustainable development and mitigating risks associated with political and commercial factors.
In conclusion, the World Bank underscored the significance of managed migration policies for addressing demographic imbalances and labor market needs globally, while emphasising the transformative potential of remittances in fostering economic stability and growth in recipient countries.
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- With inputs from agencies
