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.

News Source: The Financial Express