Just four countries, with the US at the top of the list, are the source of more than half of remittance inflows to India, Reserve Bank of India (RBI) data shows.
According to a recent report by the World Bank, India is set to receive 12 percent more remittances year-on-year, reaching $100 billion in 2022. India will retain its position as the world's top recipient of remittances.
Data from the RBI Remittances Survey, 2021 shows that the four leading countries in sending remittances to India are the US, the United Arab Emirates (UAE), the UK and Singapore.
Together, the four account for as much as 54 percent of India’s remittance inflows.
The overall share of Saudi Arabia, UAE Kuwait, Oman, and Qatar has seen a significant decline between 2016-17 and 2020-21. Their share in remittance inflows to India dropped from 54 percent to 28 percent during the period.
Structural shift
“Remittances have benefitted from a gradual structural shift in Indian migrants’ key destinations from largely low-skilled, informally employment in the Gulf Cooperation Council (GCC) countries to a dominant share of high-skilled jobs in high-income countries such as the United States, the United Kingdom, and East Asia (Singapore, Japan, Australia, New Zealand),” said the World Bank, citing RBI data.
The share of remittances from the US, the UK and Singapore in the total figure jumped from 26 percent to over 36 percent between 2016-17 and 2020-21.
US displaces UAE as the top source of inflows
The US has surpassed the UAE as the top source of remittances to India, with its share rising to 23.4 percent in 2021 from 22.9 percent in 2017. The UAE's share has fallen from 26.9 percent to 18 percent.
As many as 20 percent of Indian emigrants are based in the US and the UK. And data shows that the comparatively higher educational qualifications of the Indian diaspora in these countries are helping them to move to the highest-income-earner category.
According to the World Bank report, as much as 43 percent of Indian-born residents of the US had a graduate degree in 2019. In comparison, only 13 percent of US-born residents have a graduate degree.
Furthermore, only 15 percent of Indian-born residents aged 25 and older had no more than a high school degree, compared to 39 percent of US-born residents in that age group.
Indians in the US top Americans in median household income
Data shows that the median household income for Indians in the United States was nearly $120,000 in 2019, compared to about $70,000 for all Americans.
“The structural shift in qualifications and destinations has accelerated growth in remittances tied to high-salaried jobs, especially in services. During the pandemic, Indian migrants in high-income countries worked from home and benefitted from large fiscal stimulus packages. Post pandemic, wage hikes and record-high employment conditions supported remittance growth in the face of high inflation,” said the report.
Higher oil prices and increased demand for labour are expected to have helped Indian emigrants in GCC countries to increase remittances.
The report also mentioned the depreciation of Indian rupee against the US dollar as a factor that could have helped to increase remittances from people of Indian origin.
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