India Tops Global Remittance Flows at $125 billion in 2023: World Bank

GS Paper III Mobilization of Resources

Context: World Bank reported that India saw the highest amount of remittance flows in the world in 2023 at USD 125 billion.

India Tops Global Remittance Inflows in 2023: Key Highlights

remittance flows

Report: In World Bank’s latest Migration and Development Brief, it was reported that India has received the highest amount of remittance flows in 2023.
Top 5: India was followed by Mexico (USD 67 billion), China (USD 50 billion), the Philippines (USD 40 billion), and Egypt (USD 24 billion).
Trends:
- South Asia witnessed a 7.2 per cent increase in remittances in 2023.
- Remittance flows to Europe and Central Asia decreased by 1.4 per cent after a significant gain in 2022
- The Middle East and North Africa saw a decline in remittance flows for the second consecutive year.
Cost of Remittance: The report highlights that banks continue to be the costliest channel for sending remittances, with an average cost of 12.1 per cent.
Comparison with other transfers: Remittances have surpassed the sum of FDI and official development assistance in recent years.

Preparation: It is a semiannual report prepared by the Migration and Remittances Unit, Development Economics (DEC), the premier research and data arm of the World Bank.
Objective: It aims to update key developments and policies in migration and remittance flows.
Projection: It also provides medium-term projections of remittance flows to developing countries.

Stable Inflation: The main factors are the declining inflation and strong labour markets in high-income source countries, which boosted remittances from highly skilled Indians.
- Low inflation led to improved remittances from the US, the UK, and Singapore, collectively accounting for 36% of the total remittance.
Bilateral Agreement: India’s agreement with the UAE, for promoting the use of dirhams and rupees for bilateral trade has led to an increase in the remittances from GCC and especially UAE.
Market Conditions: Resilient labour markets in advanced economies and Gulf Cooperation Council (GCC) countries have increased remittances.
- It is a congregation of six countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.