Remittances from advanced economies surpass those from GCC nations

Countries such as the US, the UK, Singapore, Canada, and Australia collectively contributed more than half of India’s total remittances in the financial year 2023-24, surpassing those from Gulf Cooperation Council (GCC) countries, according to the Reserve Bank of India’s (RBI) monthly bulletin released on Wednesday.

Historically, GCC countries, including the UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain, have been main contributors to India’s remittances. While their share remains considerable, it has declined to 38% in FY24 signalling a change in broader trend of migration among skilled professionals to advanced economies.

India’s remittances have seen substantial growth over the past decade, rising from $55.6 billion in 2010-11 to $118.7 billion in 2023-24. These inflows have helped cover almost half of India’s trade gap and protect the economy from outside financial changes.

The RBI bulletin further stated that the migrants from India moving abroad has tripled—increasing from 6.6 million in 1990 to 18.5 million in 2024. During this period, the country’s share in the global migrant population rose from 4.3% to over 6%.

While Indian migrants in GCC countries still comprise nearly half of India’s total migrants abroad, the increasing migration of skilled professionals to advanced economies has changed the country’s remittance patterns.

The US remains the largest remittance contributor to India, with its share rising from 23.4% in 2020-21 to 27.7% in 2023-24. The UK’s share has also increased from 6.8% to 10.8% in the same period.
Even though the remittance from the GCC countries saw a decline, the UAE continues to be the second-largest remittance source for India. Its contribution increasing from 18% in 2020-21 to 19.2% in 2023-24.

The RBI bulletin identified a distinction in jobs pursued by Indians in the GCC countries and the advanced economies.

“UAE is the largest hub for Indian migrant workers engaged primarily in blue-collar jobs which are dominated by the construction industry followed by healthcare, hospitality, and tourism industry.22 This is in stark contrast to the US where Indian migrants are mainly employed in the white-collar jobs, thus explaining the higher remittances received from US despite the lower number of migrants as compared to the UAE,” the bulletin stated.

State-wise, Maharashtra received the largest share of remittances in 2023-24 at 20.5%, which is lower than its 35.2% share in 2020-21.

This was followed by Kerala, with its share nearly doubling from around 10% 19.7 per cent. Other states with significant remittance inflows included Tamil Nadu (10.4%), Telangana (8.1%), and Karnataka (7.7%).

According to the RBI bulletin, migration patterns showed that Maharashtra, Telangana, and Punjab have the highest number of Indian students studying abroad, many of whom stay back for employment, thus, contributing to the increase in remittances to these states.