Migrant workers from India are on track to send home a record amount of money this year, boosting the finances of Asia’s third-largest economy, which is poised to retain its spot as the world’s top recipient of remittances.
Remittance flows to India will rise 12% to reach $100 billion this year, according to a World Bank report published Wednesday. That puts its inflows far ahead of countries including Mexico, China and the Philippines.
Highly-skilled Indian migrants living in wealthy nations such as the US, UK, and Singapore were sending more money home, according to the report. Over the years, Indians have moved away from doing lower paid work in places like the Gulf. Wage hikes, record-high employment and a weakening rupee also supported growth.
Inflows from the world’s largest diaspora are a key source of cash for India, which lost almost $100 billion of foreign exchange reserves in the past year amid tightening global conditions that weakened currencies including the rupee against the dollar. Remittances, accounting for nearly 3% of India’s gross domestic product, are also important for filling fiscal gaps.