Macroeconomic backdrop
- Scale of the flow
- Inward remittances more than doubled from US $55.6 billion (2010‑11) to US $118.7 billion (2023‑24).
- India has stayed the world’s No. 1 recipient since 2008, lifting its share of global remittances from ≈11 % (2001) to ≈14 % (2024).
- Flows are projected to touch US $160 billion by 2029.
- Macro‑stabilising role
- Net receipts routinely finance about half of India’s merchandise‑trade deficit.
- For most years this century, remittances have exceeded gross inward FDI, under‑pinning the balance of payments with a stable, counter‑cyclical cash‑flow.
- Post‑pandemic rebound: after a ‑3.6 % dip in 2020‑21, annual growth averaged 14.3 % between 2021‑22 and 2023‑24.
- Global context
- World remittances 2024: ~US $905 billion; LMICs capture > 75 % (≈ US $685 billion).
- Top receivers 2024: India, Mexico, China, Philippines, France, Pakistan, Bangladesh (Chart 1).
- India’s stock of emigrants tripled from 6.6 million (1990) to 18.5 million (2024); share of global migrants rose from 4.3 % to > 6 %. Half of all Indians abroad live in the GCC.
- Remittances‑to‑GDP ratio: India ~3 % (stable since 2000); China < 0.3 %; Philippines far higher (Chart 2b).
Sixth round survey
Changing geography of receipts
- Advanced economies (AEs) overtake Gulf region: in 2023‑24 the US, UK, Singapore, Canada & Australia together supplied > 50 % of inflows, eclipsing combined GCC share (Table 1).
- Top ten source economies, share of India’s remittances (2023‑24)
- United States – 27.7 % (up from 23.4 % in 2020‑21) – buoyed by tight US labour market; 78 % of Indian migrants employed in high‑earning “STEM‑MBA” occupations.
- United Arab Emirates – 19.2 % (18 % in 2020‑21) – largest hub for Indian blue‑collar workers in construction, health, hospitality & tourism.
- United Kingdom – 10.8 % (6.8 % in 2020‑21) – jump linked to India–UK Migration & Mobility Partnership (May 2021); annual Indian arrivals tripled to ~ 250 k by 2023.
- Saudi Arabia – 6.7 %; Singapore – 6.6 % (up sharply from 2.4 % in the pandemic year).
- Qatar – 4.1 %, Kuwait – 3.9 %, Canada – 3.8 %, Oman – 2.5 %, Australia – 2.3 %.
- All GCC six (UAE, Saudi, Kuwait, Qatar, Oman, Bahrain): 38 % (still below their pre‑COVID dominance).
Remittance: Inward distribution across Indian states/UTs (2023‑24)
| Rank | State / UT | Share % | Notable trend |
| 1 | Maharashtra – 20.5 % | Down from 35.2 % in 2020‑21; reflects surge elsewhere rather than contraction. | |
| 2 | Kerala – 19.7 % | Doubled from 10.2 %; mirrors fresh wave of student & skilled migration. | |
| 3 | Tamil Nadu – 10.4 % | Stable rise. | |
| 4 | Telangana – 8.1 % | Newly measured; large student & tech-worker cohort abroad. | |
| 5 | Karnataka – 7.7 % | Strong IT‑services diaspora. | |
| 6‑10 | Andhra Pradesh (4.4 %), Delhi‑NCT (4.3 %), Punjab (4.2 %), Gujarat (3.9 %), Uttar Pradesh (3.0 %) | ||
| Long‑tail | Shares between 0.01–2.9 % cover every remaining state/UT (Table 2) showing widening dispersion of recipients. |
Cost landscape
- Global benchmark – average fee to send US $200: 6.65 % (Q2 2024), down from 9.67 % in Q1 2009, still above G‑20 target 5 % and SDG target 3 %.
- India corridor:
- Overall average (US $200, 2023): 4.9 % – below world mean, already beats G‑20 goal but above SDG ambition.
- Digital transfers cost 4.0 %, ≈100 bp cheaper than blended India average, and 1.3 pp below world digital average (5.3 %).
- Weighted survey results:
- < US $200 transfers – average cost 4.6 %.
- US $200‑500 transfers – 2.4 %.
- Cost hierarchy: highest via foreign‑currency Nostro route, next INR Vostro route; cheapest via RDA (MTOs & fintechs) across all sizes.
- Digital share:
- 73.5 % of all remittances handled by MTOs reached India digitally in 2023‑24.
- Country‑leaders in digital penetration: Saudi Arabia 92.7 %, Australia 89.5 %, Qatar 76.2 %, UAE 76.1 %.
Structural & policy insights
- Diaspora shift: acceleration in skilled migration to AEs (STEM & services) is re‑balancing remittance geography away from GCC’s blue‑collar dominance.
- Fintech competition: inclusion of digital‑only players under RDA is compressing fees and speeding delivery, especially for small‑value (sub‑US $200) transfers.
- Digital public infrastructure (DPI): India’s UPI linkages with Singapore, UAE, Mauritius, etc., and participation in Project Nexus (multilateral ASEAN FPS link) promise further reductions in cost & friction.
- Workforce imperative: with India’s working‑age population projected to keep rising until 2048, sustained up‑skilling & re‑skilling is essential to leverage the diaspora dividend.
- SDG cost target: India is ahead of the global curve yet still needs ≈ 1.9 pp reduction in average fees on sub‑US $200 tickets to hit the 3 % benchmark by 2030.
(Information base – The Reserve Bank of India)