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

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

• 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.

About the Migration and Development Brief

• 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. 

Reasons for the rise in FDI in India in 2023

• 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. 

Source: Business Today