Did you know that India is set to become the largest remittance receiving country in the world in 2024? Yes, Indian diaspora is sending $129 billion to their country from all corners of the world. This amount is more than the annual budget of Pakistan and Bangladesh combined. Let’s take a look at the various aspects of this unique achievement.
What is Remittance?
Meaning of Remittance
Remittance means the amount of money that people working abroad send to their country. It is not only a financial support for families but also contributes significantly to the country’s economy.
Why is Remittance Important?
- Foreign Exchange Flow: Remittance brings foreign exchange into the country.
- Economic Stability: It stabilizes the income of local families.
- Boost to National Budget: It contributes to the GDP of any country.
Remittance Highlights for India in 2024
India on top
India received remittances worth $129 billion in 2024, which is:
- More than the combined budgets of Pakistan ($67 billion) and Bangladesh ($68 billion).
- Almost twice that of Mexico ($68 billion).
Comparison to other countries
| Country | Remittances ($ billion) |
|---|---|
| India | 129 |
| Mexico | 68 |
| China | 48 |
| Philippines | 40 |
| Pakistan | 33 |
Growth over previous years
- Remittances grew by 5.8% in 2024, compared to 1.2% in 2023.
- This growth reflects the economic recovery post COVID-19.
Historical Perspective of Remittances
Evolution of Remittances over the last 10 years
India received remittances worth nearly $1 trillion ($982 billion) between 2014 and 2024.
Year-wise figures:
- 2014: $70 billion
- 2015: $69 billion
- 2016: $63 billion
- 2017: $69 billion
- 2018: $79 billion
- 2019: $79 billion
- 2020: $83 billion (despite COVID)
- 2021: $105 billion
- 2022: $111 billion
- 2023: $125 billion
- 2024: $129 billion
Sources of remittances
Main migrant countries
Indian migrants mainly send remittances from the following countries:
- United Arab Emirates (UAE)
- United States of America (USA)
- Saudi Arabia
- Canada
- United Kingdom (UK)
Who are these migrants?
- Skilled workers
- Engineers and doctors
- Businessmen
- Unorganized sector workers
Impact of remittances
Impact on Indian economy
- Contribution more than FDI: FDI in 2024 was $62 billion, while remittances were twice that.
- More than defense budget: This is $55 billion more than India’s 2024 defense budget.
Impact on rural and urban families
- Improvement in education and health services.
- Help in reducing poverty.
- Providing capital to small businesses.
Opinion of economic experts
World Bank report
According to experts, the hard work and dedication of Indian immigrants has strengthened the economic condition of the country.
Remittances and economic reforms
- The rapid increase in remittances after Covid has been helpful in rebuilding the Indian economy.
- This is a sign of long-term economic stability.
India’s Challenges in Remittance
Increasing Competition
- Competition from countries like China, Philippines.
Barriers to Money Transfer
- High transaction fees.
- Delay in foreign exchange.
Reform Measures
- Promote digital transactions.
- Reduce the cost of money transfer services.
- Policy reforms for migrant workers.
Future Prospects
India’s Prospects
- Further growth in remittance is possible with the increasing use of Digital India and Fintech.
- The number of skilled workers can be increased through skill development programs.
New Investment Opportunities
By turning remittances into investments:
- Investment in infrastructure projects.
- Promotion of startups in rural areas.
Conclusion
India’s diaspora community has made the country proud globally with their hard work in 2024. This height of remittance is not only an economic success but also shows how deeply the Indian diaspora is connected to its roots.
Frequently Asked Questions (FAQs)
1. How much remittance did India receive in 2024?
India received remittances worth $129 billion in 2024.
2. Who are the top countries in remittances?
India, Mexico, China, Philippines, and Pakistan are the top countries in remittances.
3. How does remittance help the Indian economy?
It helps in bringing in foreign exchange, reducing poverty, and increasing national income.
4. Which countries are the main sources of remittances in India?
UAE, US, Saudi Arabia, Canada, and UK.
5. What is the difference between remittance and FDI?
Remittance is the money sent by NRIs, while FDI is the investment by foreign companies.