Remittance inflows in India to top $100 billion in 2022: World Bank brief

Remittance inflow in India in 2022 is expected to top the $100 billion mark for the first time ever. It will continue to retain the top spot in the list of countries with the highest remittance receipts, a report by World Bank said.  

"Remittance flows to India were enhanced by the wage hikes and a strong labour market in the United States and other OECD countries," World Bank said in its Migration and Development Brief. 

India will be followed by Mexico with $60 billion in remittance receipts. At $51 billion, China, which occupied the second spot earlier will receive the third-highest remittances this year, the report added. However, in the South Asia region, the remittances in all countries except Nepal and India are expected to fall.

The rupee's falling value also led to a rise in remittance flows.

"Indian migrants may have taken advantage of the depreciation of the Indian rupee vis-à-vis the US dollar (10 per cent between January and September 2022) and increased remittance flows," the brief said. 

It added that the remittance inflow pattern in India has undergone a structural shift from gulf countries to high-income countries in the past few years. 

"Remittances have benefitted from a gradual structural shift in Indian migrants’ key destinations from largely low-skilled, informally employment in the Gulf Cooperation Council (GCC) countries to a dominant share of high-skilled jobs in high-income countries such as the United States, the United Kingdom, and East Asia (Singapore, Japan, Australia, New Zealand). Between 2016–17 and 2020–21, the share of remittances from the United States, United Kingdom, and Singapore increased from 26 per cent to over 36 per cent, while the share from the 5 GCC countries (Saudi Arabia, United Arab Emirates, Kuwait, Oman, and Qatar) dropped from 54 to 28 per cent," the report added. 

Moreover, a change in the qualifications also led to a change in remittance patterns and quantum. 

"The structural shift in qualifications and destinations has accelerated growth in remittances tied to high-salaried jobs, especially in services. During the pandemic, Indian migrants in high-income countries worked from home and benefitted from large fiscal stimulus packages. Post-pandemic, wage hikes and record-high employment conditions supported remittance growth in the face of high inflation," the report added.