Remittances In India

Context:

As per the Ministry of Finance, In the fiscal year 2022-23 (FY23), remittances to India witnessed a substantial growth of 26%, reaching a total of $112.5 billion. In FY22 the remittance was $89.1 billion.

About Remittance:

Remittances refer to the transfer of money by individuals who are living and working in another country (usually as migrants) back to their home country.
Remittances can be sent through various formal channels such as banks, money transfer companies, or online platforms, and they play a significant role in foreign exchange.

Remittances vs. FDI:

Amid a slowdown in foreign direct investment (FDI) inflows across international borders, remittances to India have surged.
Despite the launch of 14 production-linked incentive schemes, India’s FDI declined to $70.97 billion in FY23, down from $84.8 billion in FY22.

Top Source of Remittance for India::

The Reserve Bank of India’s survey for 2020-21 highlights the major sources of inward remittances to India:
- USA holds the top spot, contributing 23.4% of total remittances.
- UAE follows closely with an 18% share.
- UK, Singapore, and Saudi Arabia contribute 6.8%, 5.7%, and 5.1%, respectively.