Remittances to India

Remittances to India are money transfers (called remittance) from non-resident Indians (NRIs) employed outside the country to family, friends or relatives residing in India. India is the world's top receiver of remittances, claiming more than 12% of the world's remittances in 2015.^[1][2] Remittances to India stood at US$110 billion in 2022, US$125 billion in 2023 and remittances from India to other countries totalled US$5.710 billion, for a net inflow of US$63.258 billion in 2017.^[3][4][5]

As per the Ministry of Overseas Indian Affairs (MOIA), remittance is received from the approximately 35 million members of the Indian diaspora.^[6]

History

Overview

Under the Foreign Exchange Management Act (FEMA) of 1999, Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) can open and maintain three types of accounts namely, Non-Resident Ordinary Rupee Account (NRO Account), Non-Resident (External) Rupee Account (NRE Account) and Foreign Currency Non Resident (Bank) Account – FCNR (B) Account. NRO Accounts are not repatriable except for all current income. Balances in an NRO account of NRIs/ PIOs are remittable up to US$1 (one) million per financial year (April–March) along with their other eligible assets. NRE Accounts are repatriable. Credits permitted to NRE account are inward remittance from outside India, interest accruing on the account, interest on investment, transfer from other NRE/ FCNR(B) accounts, maturity proceeds of investments (if such investments were made from this account or through inward remittance). Inward remittances from outside India, legitimate dues in India and transfers from other NRO accounts are permissible credits to NRO account.^[7][8]

Since 1991, India has experienced sharp remittance growth. In 1991 Indian remittances were valued at US$2.1 billion;^[5][9] in 2006, they were estimated at between $22 billion^[10] and $25.7 billion.^[4] which grew to $67.6 billion in 2012–13, up from $66.1 billion the fiscal year, 2011–2012,^[6] when the remittance exceed the foreign direct investment (FDI) inflow of $46.84 billion into India.^[11]

Money is sent to India either electronically (for example, by SWIFT) or by demand draft. In recent years many banks are offering money transfers and this has grown into a huge business. Around 40% of the India's remittances flow to the states of Kerala, Tamil Nadu, Punjab, Andhra Pradesh and Uttar Pradesh which are among the top international remittance receiving states.^[11][12] Andhra Pradesh gets most of its remittance from the US, Kerala from UAE, Punjab from Canada as most of the people migrate from their states to these countries. Tamil Nadu has the most diverse mix of remittance sources due to the presence of large Tamil diasporas in many countries like Australia, Canada, France, United Kingdom etc. with Malaysia, Singapore and the US being the largest sources of remittance. Research work on remittances to India is listed in the India Migration Bibliography.^[13]

In recent years many Indian Immigrants have used online money transfer services to send money from overseas to India. In recent years, many new Online and mobile companies have facilitated the transition to online remittances. Even some Indian banks have recently offered such services.^[14]

A 2012 study, by Reserve Bank of India revealed 30.8% of total foreign remittances was from West Asia, compared to 29.4% from North America and 19.5% from Europe.^[11]

However, owing to the onslaught of COVID-19, the World Bank has estimated a 9% decline in the remittances to India.^[15]

Remittances to India by fiscal year

The following table illustrates the remittances to India as percent of GDP, 1990–1991 to 2005–2010.^[16][17][18]

Remittance by fiscal year

Year	Remittances	Percent GDP
1990–1991	US$2.10 bn	0.70%
1995–1996	US$8.50 bn	3.22%
1999–2000	US$12.07 bn	2.72%
2000–2001	US$12.85 bn	2.84%
2001–2002	US$15.40 bn	3.29%
2002–2003	US$16.39 bn	3.39%
2003–2004	US$21.61 bn	3.69%
2004–2005	US$20.25 bn	3.03%
2005–2006	US$24.55 bn	3.08%
2006–2007	US$29.10 bn	2.39%
2007–2008	US$37.20 bn	2.77%
2008–2009	US$51.60 bn	3.84%
2009–2010	US$55.06 bn	3.28%
2011–2012	US$66.10 bn	3.61%
2012–2013	US$67.60 bn	3.64%
2013–2014	US$70.39 bn	3.45%
2014–2015	US$66.30 bn	3.15%
2015–2016	US$62.70 bn	2.73%
2016–2017	US$65.30 bn	2.46%
2017–2018	US$80.00 bn	2.95%
2018–2019	US$79.00 bn	2.78%
2019–2020	US$83.30 bn	3.12%
2020–2021	US$87.00 bn	2.75%
2021-2022	US$89.00 bn	3.00%
2022-2023	US$110 bn	3.30%
2023-2024	US$125 bn	3.40%

Remittances to and from India by country

According to the RBI Governor Shaktikanta Das total of US$107.5 billion (2022–23) was made in remittances to India from other countries. Whereas total of US$7.01 billion (2020) was made in remittances to other countries from India. The following tables list the top ten source countries for remittances to India and the top ten destination countries for remittances from India in 2017.^[3] Somewhat different figures have been estimated by the Reserve Bank of India.^[19]