Even as growth in outward remittance from the region is projected to be less than previous year, the inward remittance is surging.
Forex players in the region maintained the outward remittances has been impacted mainly because they have seen a decline in number of students going overseas last year, the growth in inward remittance especially in last few months have surprised them. The outward remittance market is considered to be 1 lakh crore market while the inward remittance market is worth Rs 2,50,000 crore market. In outward remittances education and tour and travel share more than half pie of the market share of outward remittances. Regional officials from foreign exchange division of Thomas Cook India Limited (TCIL) maintained in last couple of months there has been surge in inward remittance.
Amit Narang, country head, Paul Merchants Ltd, one of the prominent forex player in the region, maintained the strong dollar has indeed resulted in surge in inward remittances. Paul Merchants has partnered with the Western Union for providing international money transfer services in India. The growth in inward remittance in last 3-4 months (August-December) compared to corresponding period previous year has been around 15 per cent. The average growth observed in the inward remittances, as per forex players, generally averages around 10 per cent. Narang maintains firming of dollar could be the possible reason behind surge in inward remittances. However, the outward remittance business, which since 2008 was gaining grounds, seems to have lost momentum, last year. Narang reveals in outwards remittance the story has been opposite. With the flow of students to Australia and UK declining due to various reasons it has also impacted the outward immigration, thereby hurting the remittance.
Regional official from TCIL maintained around 30% decline has been observed in the outwards remittance this year.
As education contributes around 30% to the overall ‘outward remittance business’ ,any impact on the sector obviously hurts the business.
The value growth in outward remittance however may still not be in proportion to decline in education business primarily because of two reasons.
While the tour and travel sector which contributes 45% to the outward remittance has remained buoyant even this year . Also the firm dollar would provide some cushion and result in value growth in the outward remittance business.