Making India Proud

As a country, India received $107 billion as remittances from the Diaspora in the last financial year, creating a world record

India topped the list of countries with highest remittances in the fiscal year 2023-24, with overseas Indians sending a record-breaking $107 billion in remittances to their relatives in India, surpassing the $100 billion mark for the second consecutive financial year.

According to a report in the Times of India, these net remittances are nearly twice the amount of net foreign investments, which include both FDI and portfolio investments, totalling $54 billion during the same period.

Several global studies and domestic research have suggested that remittances are connected to the level of migration in various economies, as well as job opportunities and the economic situation in the source countries. The cost of remittances is also considered a factor influencing overseas remittances.

The gross remittances by the Indian diaspora, as reflected in private transfers in the balance of payments, reached $119 billion in FY 2023-24. After accounting for the repatriation of income by private foreign residents and other remittances, the net private transfers amounted to $107 billion.

The United States remained the largest source of remittances. In 2023, the top five remittance recipient countries were India ($125 billion), Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion).

An RBI survey on remittances conducted after the Covid pandemic showed that the United States is the largest source of remittances, accounting for 23% of the total, while flows from the Gulf region have decreased. The survey also indicated that the majority of these remittances are used for family needs, with a portion also being invested in other assets such as deposits.

According to the World Bank’s “Migration and Development Brief” released in December, India has been the top recipient of remittances from its diaspora for more than 20 years, largely driven by the increase in IT professionals moving to North America and Europe since the 1990s.

However, the World Bank Report predicts that due to the trajectory of weaker global economic activity, the growth of remittances to low-and-middle income countries is expected to soften further to 3.1% in 2024. This moderated forecast is driven by slowing economic growth and the prospect of weaker job markets in several high-income countries.

Incidentally, the Indian diaspora is the largest in the world, numbering more than 18 million.

The top three destinations for Indians are taken by UAE, the US and Saudi Arabia. The numbers clearly tell that India has overtaken both Mexico and Russia in two decades.

Remittances are one important way that the Indian diaspora contributes to the economy. These are financial or in-kind transfers made by migrants directly to families or communities in their countries of origin.

Non-resident Indians, or NRIs, support their family and boost the economy of their home nation by sending money home. Remittances contribute almost 3% of India’s GDP.

In addition to contributing to India’s economy, the Indian diaspora has also a major cultural impact. The global dispersion of the Indian diaspora contributes to a culturally diverse tapestry. Numerous mediums, including food, music, dance, art, and festivals, are used to represent it. Not only this, Indian customs are becoming more widely recognised and appreciated worldwide as a result of the fusion of Indian cultural aspects with regional cultures in many nations.

Bollywood, or the Indian film industry, has a sizable following across the world. Members of the Indian diaspora have been instrumental in marketing Bollywood stars and films abroad. Indian restaurants are flourishing in many nations, and Indian food has become incredibly popular all over the world. The unique flavours and spices of Indian cuisine are now appreciated throughout the world owing in part to the culinary influence brought by the Indian diaspora.

It may be noted that over the years, the Ministry of External Affairs has launched various initiatives to connect Overseas Indians. The Overseas Citizenship of India (OCI) Scheme is one such example. This scheme was launched at the convention of Pravasi Bharatiya Divas, 2006, at Hyderabad. It allows all Persons of Indian Origin to register themselves as OCI, which means one can travel to India visa-free and that too, for lifelong.

In addition, the Government of India confers the Pravasi Bharatiya Samman Award, the highest Indian award to Overseas Indians or an organisation/institution by Overseas Indian Diaspora, for their contribution in various fields. The award is presented by the President of India. Some OCIs have also been conferred with Padma awards.

In sum, there are various prospects in which the Indian diaspora could contribute to the development of the nation and in turn, can utilise various opportunities for mutually beneficial exchanges.