India is currently the largest remittance receiving country in the world. In 2018, Indian expats sent home USD 80 billion. The remittances have constantly increased over the last three years.
India – The largest remittance receiving country in the world
India is at the top in terms of receiving remittances and is followed by China with USD 67 billion and Mexico and Philippines with USD 34 billion each. It is expected that the global remittances will grow by 10.3 percent and will reach USD 689 billion. The remittances received in India have consistently increased over the years from USD 62.7 billion in 2016 to USD 65.3 billion in 2017. These remittances constitute a major part of the GDP of India. The remittances to South Asia in 2018 reached USD 132 billion and showed an increase of 13.5% as compared to the previous year.
Why is India the top recipient of remittances?
It is projected that in 2019, the remittances to the country will grow by 3.7% and reach USD 715 billion by the end of 2019. India received USD 80 billion as remittances in 2018. The amount remitted to the low and medium income countries has increased to 8.5% and amounted to USD 466 billion, whereas the global remittances amounted to USD 613 billion and showed a 7% increase, as compared to the previous year. The increase in oil prices and the strengthening of Russian ruble and euro led to the boost in figures.
India has the highest remittances mainly due to the number of Indian migrants. More than 16 million Indians live abroad and this is higher than any other country. A majority of Indians live in the Gulf region followed by developed countries in Europe, USA, and Canada. The expats remit to India to their loved ones back home regularly. Indians have a strong bond for their native country and they want to retain strong ties. This is also applicable to the second or third-generation of Indians who might have never visited India or come to India very rarely but still wish to maintain a strong bond with their dear ones.
Another reason is the huge number of migrants in the Gulf. The largest migrants are in the United Arab Emirates followed by Saudi Arabia, Oman, and Kuwait. They fall in the blue-collar segment and their families are heavily dependent on their remittance to India. This amount helps them in their household expenses, medicine, school expenses, and gives them an opportunity to lead a better lifestyle. They send money home irrespective of the currency exchange rate in the market.
The global average cost of sending USD 200 abroad stood at 7.1% in the first quarter of 2018, which is more than double as per the target of 3% set by the United Nations. The remittances to India are only expected to rise in the coming years and will reach a substantial amount. This remittance plays a strong role in the GDP of the country and helps developing countries across the world.