Mumbai, July 1: The remittances sent back home by Indians working abroad have registered a 14 per cent rise in the financial year 2024-25 to a record $135.46 billion, according to data compiled by the RBI. The RBI said the inflows, classified under “private transfers”, accounted for more than 10 per cent of India’s gross current account flows of $1 trillion in FY25.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $33.9 billion in the January-March quarter of 2024-25 from $31.3 billion in the same quarter of the previous year, RBI data shows.
Indians working abroad sent home a record $129.4 billion in 2024, with the highest ever inflows of $36 billion in the October-December quarter. India tops the list of recipient countries for remittances in 2024 and is way ahead of second-placed Mexico with $68 billion. China ($48 billion) is in the third spot, followed by the Philippines ($40 billion) and Pakistan ($33 billion), according to figures compiled by World Bank economists.
The growth rate of remittances in the 2024 calendar year is estimated to be 5.8 per cent, compared to 1.2 per cent registered in 2023, according to the World Bank data. The number of Indians working overseas has tripled from 6.6 million in 1990 to 18.5 million in 2024, with its share in global migrants rising from 4.3 per cent to over 6 per cent during the same period.
Indian migrants in the Gulf countries account for around half of the total Indian migrants in the world. The recovery of the job markets in the high-income countries of the Organisation for Economic Co-operation and Development (OECD), following the onset of the Covid-19 pandemic, has been the key driver of remittances.
This is especially true for the United States, where the employment of foreign-born workers has recovered steadily and is 11 per cent higher than the pre-pandemic level seen in February 2020. Meanwhile, in a big relief to Indian professionals working in the US and Non-Resident Indians (NRIs) sending money to India, the updated draft of the One Big Beautiful Bill Act proposed by President Donald Trump has reduced the tax rate on remittances to 1 per cent, down from the 5 per cent proposed initially.
Software services and business services were the other major contributors to India’s current account inflows in FY25, each bringing in over $100 billion. Together with remittances, these three sources accounted for more than 40 per cent of total current account receipts and have helped to keep India’s current account deficit in check.
IANS
