Remittances to India are money transfers (called

remittance A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes ...

) from non-resident Indians (NRIs) employed outside the country to family, friends or relatives residing in India. India is the world's top receiver of remittances, claiming more than 12% of the world's remittances in 2015. Remittances to India stood at billion in 2023, up from billion in 2017. Remittances from India to other countries totalled billion in 2017, for a net inflow of billion in 2017. As per the Ministry of Overseas Indian Affairs (MOIA), remittance is received from the approximately 35 million members of the

Indian diaspora Overseas Indians (ISO 15919, ISO: ), officially Non-Resident Indians (NRIs) and People of Indian Origin (PIOs) are people of Indian descent who reside or originate outside of India (Including those that were directly under the British Raj). Acc ...

. Remittances to India have long been a cornerstone of the nation's economy, significantly contributing to household incomes, economic stability, and overall development. These financial transfers from non-resident Indians (NRIs) are vital not only for the families receiving them but also for the broader economic landscape of the country. As one of the largest recipients of remittances globally, India benefits immensely from the steady flow of funds sent by its vast diaspora.

History

Overview

Remittances to India have a rich historical backdrop dating back to the colonial era when Indian laborers were transported to various British colonies. Over 1.5 million Indians were laborers transported to multiple British colonies between 1834 and 1917. This migration, predominantly to regions like the

Caribbean The Caribbean ( , ; ; ; ) is a region in the middle of the Americas centered around the Caribbean Sea in the Atlantic Ocean, North Atlantic Ocean, mostly overlapping with the West Indies. Bordered by North America to the north, Central America ...

and Southeast Asia, served the economic interests of the

British Empire The British Empire comprised the dominions, Crown colony, colonies, protectorates, League of Nations mandate, mandates, and other Dependent territory, territories ruled or administered by the United Kingdom and its predecessor states. It bega ...

while significantly impacting the socio-economic landscape of India. The remittances sent back by these migrant workers played a crucial role in supporting families left behind, contributing to local economies, and fostering economic ties between regions. Post-independence, the patterns of Indian migration and remittances shifted, influenced by global economic dynamics. During the latter half of the 20th century, Indians increasingly moved to countries in the Middle East, North America, and Europe in search of better employment opportunities. During the 1990s, India experienced a significant increase in remittance inflows. According to

World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...

data, remittances to India rose from approximately $2 billion in 1990 to $82.2 billion in 2019, reflecting a remarkable growth trajectory. This migration wave saw a corresponding increase in remittance flows, which continued to grow through the 21st century despite global economic fluctuations. From 2001 to 2010, India experienced a substantial increase in remittance inflows, rising from approximately $12 billion at the start of the decade to about $55 billion by its conclusion, according to World Bank data. From 2011 to 2020, remittances continued to grow in the subsequent decade, albeit with fluctuations influenced by global economic conditions. Starting at $58 billion in 2011, remittances peaked at around $83 billion in 2020, demonstrating resilience despite challenges such as the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

and geopolitical shifts. Under the Foreign Exchange Management Act (FEMA) of 1999, N Indians (NRIs) and Persons of Indian Origin (PIOs) can open and maintain three types of accounts namely, Non-Resident Ordinary Rupee Account (NRO Account), Non-Resident (External) Rupee Account (NRE Account) and Foreign Currency Non Resident (Bank) Account – FCNR (B) Account. NRO Accounts are not repatriable except for all current income. Balances in an NRO account of NRIs/ PIOs are remittable up to US$1 (one) million per financial year (April–March) along with their other eligible assets. NRE Accounts are repatriable. Credits permitted to NRE account are inward remittance from outside India, interest accruing on the account, interest on investment, transfer from other NRE/ FCNR(B) accounts, maturity proceeds of investments (if such investments were made from this account or through inward remittance). Inward remittances from outside India, legitimate dues in India and transfers from other NRO accounts are permissible credits to NRO account. Since 1991, India has experienced sharp

growth. In 1991 Indian remittances were valued at US$2.1 billion; in 2006, they were estimated at between $22 billion and $25.7 billion. which grew to $67.6 billion in 2012–13, up from $66.1 billion the fiscal year, 2011–2012, when the remittance exceed the

foreign direct investment A foreign direct investment (FDI) is an ownership stake in a company, made by a foreign investor, company, or government from another country. More specifically, it describes a controlling ownership an asset in one country by an entity based i ...

(FDI) inflow of $46.84 billion into India. Money is sent to India either electronically (for example, by

SWIFT Swift or SWIFT most commonly refers to: * SWIFT, an international organization facilitating transactions between banks ** SWIFT code * Swift (programming language) * Swift (bird), a family of birds It may also refer to: Organizations * SWIF ...

) or by demand draft. In recent years many banks are offering money transfers and this has grown into a huge business. Around 40% of the India's remittances flow to the states of

Kerala Kerala ( , ) is a States and union territories of India, state on the Malabar Coast of India. It was formed on 1 November 1956, following the passage of the States Reorganisation Act, by combining Malayalam-speaking regions of the erstwhile ...

, Tamil Nadu,

Punjab Punjab (; ; also romanised as Panjāb or Panj-Āb) is a geopolitical, cultural, and historical region in South Asia. It is located in the northwestern part of the Indian subcontinent, comprising areas of modern-day eastern Pakistan and no ...

, Andhra Pradesh and

Uttar Pradesh Uttar Pradesh ( ; UP) is a States and union territories of India, state in North India, northern India. With over 241 million inhabitants, it is the List of states and union territories of India by population, most populated state in In ...

which are among the top international remittance receiving states. Andhra Pradesh gets most of its remittance from the US, Kerala from

UAE The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a federal elective monarchy made up of seven emirates, with Abu Dhabi serving as i ...

, Punjab from Canada as most of the people migrate from their states to these countries. Tamil Nadu has the most diverse mix of remittance sources due to the presence of large Tamil diasporas in many countries like Australia, Canada, France, United Kingdom etc. with Malaysia, Singapore and the US being the largest sources of remittance. Research work on remittances to India is listed in the India Migration Bibliography. In recent years many Indian Immigrants have used online money transfer services to send money from overseas to India. In recent years, many new Online and mobile companies have facilitated the transition to online remittances. Even some Indian banks have recently offered such services. A 2012 study, by

Reserve Bank of India Reserve Bank of India, abbreviated as RBI, is the central bank of the Republic of India, and regulatory body responsible for regulation of the Indian banking system and Indian rupee, Indian currency. Owned by the Ministry of Finance (India), Min ...

revealed 30.8% of total foreign remittances was from West Asia, compared to 29.4% from North America and 19.5% from Europe. However, owing to the onslaught of

COVID-19 Coronavirus disease 2019 (COVID-19) is a contagious disease caused by the coronavirus SARS-CoV-2. In January 2020, the disease spread worldwide, resulting in the COVID-19 pandemic. The symptoms of COVID‑19 can vary but often include fever ...

, the

has estimated a 9% decline in the remittances to India.

Remittances to India by fiscal year

The following table illustrates the remittances to India as percent of GDP.

Remittances to and from India by country

According to the former RBI Governor Shaktikanta Das total of US$107.5 billion (2022–23) was made in remittances to India from other countries. Whereas total of US$7.01 billion (2020) was made in remittances to other countries from India. The following tables list the top ten source countries for remittances to India and the top ten destination countries for remittances from India in 2017. Somewhat different figures have been estimated by the

. India's status as a leading recipient of remittances is driven by its extensive network of expatriates spread across the globe, who send money home through various channels, including traditional banks, ACH or wire transfers, and digital providers. India's status has emerged as one of the largest recipients of

s globally. In 2021, remittances surged to approximately $105.6 billion, reflecting ongoing support from overseas Indian communities amidst global economic uncertainties. By 2022, remittances surged to the highest value of $111+ billion, affirming India's position as a top destination for financial transfers worldwide. In 2023, India received an estimated $125 billion in remittances, marking a significant increase and highlighting the continued importance of these financial inflows to the Indian economy. The primary sources of remittances to India include the United States, the United Arab Emirates, Saudi Arabia, and the United Kingdom. These countries host large Indian communities that regularly send home money to support their families and invest in various sectors. The diversity in the sources of remittances ensures a stable and continuous flow of funds, even when specific regions face economic challenges.

Remittances to India

According to RBI and World Bank Knomad Bilateral remittance matrix, the top ten source countries for remittance to India in 2017 are as follows.

References

External links

Ministry of Overseas Indian Affairs, Official website

Remittance Flows Worldwide in 2015 – Pew Research Center
{{Economy of India I Economy of India Indian diaspora Investment in India