Moneycontrol

Budget 2023Budget 2023

PARTNERS

  • Tata AIA Life Insurance
  • Hafele
  • Motilal Oswal
  • SMC Global Securities Limited
Budget & You Live : Real-Time Analysis Of All The FM’s Big Announcements
Budget 2023
Budget 2023
you are here: HomeNewsOpinion

Opinion | Russia could be the next big market for Indian labour as low oil prices depress the Gulf

As oil prices soften, there are fears that job creation in the Middle East will decline, and India could lose some workers there.

December 07, 2018 / 02:04 PM IST
Russia's President Vladimir Putin (C), China's President Xi Jinping (R) and India's Prime Minister Narendra Modi attend a meeting on the sidelines of the G20 summit in Buenos Aires, Argentina November 30, 2018. Picture taken November 30, 2018. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS  ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. - RC1750152830

Russia's President Vladimir Putin (C), China's President Xi Jinping (R) and India's Prime Minister Narendra Modi attend a meeting on the sidelines of the G20 summit in Buenos Aires, Argentina November 30, 2018. Picture taken November 30, 2018. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. - RC1750152830

Despite fears that the depressed oil prices hit remittances to India, the country remained the top recipient of global remittances in 2017. World Bank data shows that Indians remitted $69 billion back to their home country, higher than China’s $67 billion. Philippines ($33 billion), Mexico ($31 billion) and Nigeria ($22 billion) were the other top recipients.

Remittance to India

As the chart shows, remittances began surging after 1991. Clearly, liberalisation was good for remittances well. In spite of low oil prices and declining economic growth, global remittances are expected to grow 4.6 percent to $642 billion in 2018. The pick-up in growth of remittances in 2017 and an expectation of further growth in 2018 is good news for India.

But there is cause for anxiety as well. Indian remittances have still not reached the peak of $70.3 billion seen in 2015.  As oil prices soften, there are fears that job creation in the Middle East will decline, and India could lose some workers there. Today, as much as 82 percent of India’s remittances come from seven countries - UAE, the US, Saudi Arabia, Qatar, Kuwait, the UK, and Oman.