India to receive record USD 100 billion in remittances in 2022, says World Bank

World Bank, in its latest Migration and Development Brief, has said that remittances flow to India will rise 12 percent, putting its inflows ahead of China, Mexico, and the Philippines. 

India Remittances 2022
India Remittances 2022

India Remittances 2022: Retaining its spot as the world’s top recipient of remittances, migrant workers from India are set to send home a record USD 100 billion in 2022. The growth is despite global headwinds like rising prices.

World Bank, in its latest Migration and Development Brief, has said that remittances flow to India will rise 12 percent, putting its inflows ahead of China, Mexico, and the Philippines. Notably, not just in India, remittances to South Asia grew an estimated 3.5 percent to USD 163 billion in 2022.

India to receive record remittances in 2022

1. High-skilled Indian migrants living in wealthy nations such as the United States, United Kingdom, and Singapore were sending money home, as per the report.

2. Over the years, Indians have moved away from doing lower-paid work in places such as Gulf. Wage hikes, record-high employment, and a weakening rupee also supported the growth.

3. Remittances accounting for nearly 3 percent of India’s Gross Domestic Product are also important for filling fiscal groups.

4. Inflows from the world’s largest diaspora are a key source of cash for India, which lost almost $100 billion of foreign exchange reserves in the past year amid tightening global conditions that weakened the currencies including the rupee against the dollar.

India Remittances 2022: What are the sources?

1. Cash transfers to India from high-income countries climbed to more than 36% in 2020-21, up from 26 percent in 2016-17.

2. The share from five Gulf countries, including the United Arab Emirates and Saudi Arabia, declined to 28 percent from 54% in the same period, as World Bank.

3. However, the trend isn’t uniform across South Asia. Remittances earned by the migrants from Pakistan, Bangladesh, and Sri Lanka are expected to drop this year, as domestic and external shocks hit those countries hard.

4. As per World Bank, migrants responded to exchange rate depreciations in their home countries by sending less money through formal channels and opting for the black market premia in parallel exchange markets.

What is a Remittance?

A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for a household income in their home country or homeland. Money sent home by migrants competes with international aid as one of the largest financial flows to developing nations.

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