RBI’s Remittance Survey (2023-24) Highlights

RBI’s Remittance Survey analyzes trends in inward remittances to India, identifying source countries, usage patterns, and regional inflows. It helps shape policies for financial inclusion and managing foreign exchange.

Context: According to the recently released RBI remittance survey Advanced Economies now account for more than 50% of total remittances to India.

What are Remittances?

Remittances are money transfers made by individuals working abroad to their families or relatives in their home country.
For India, they are a vital source of: Foreign exchange reserves, Household income support & Development finance.
Remittance comes under the transfer payment category in the current account of the Balance of Payments (BoP).
India is the world’s top recipient of remittances.

Highlights of RBI’s Remittance Survey (2023-24)

Advanced Economies (AEs) now account for more than 50% of total remittances to India.
The United States is the largest contributor, with a 7% share of total remittances in 2023-24.
Gulf countries’ share is declining steadily.

Why Remittances from the Gulf are Declining

Historical Background

Gulf Cooperation Council (GCC) countries — UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, Oman — have traditionally been top sources due to high Indian blue-collar migration.

Reasons for Decline

Post-Covid Economic Downturn: Job losses and pay cuts reduced remittance capacity.
“Nationalisation” Policies: E.g. Saudisation/Nitaqat in Saudi Arabia promotes local employment over foreign workers.
Falling Contribution Share (2016-17 ➝ 2023-24):
- UAE: 26.9% ➝ 19.2%
- Saudi Arabia: 11.6% ➝ 6.7%
- Kuwait: 6.5% ➝ 3.9%

Reasons behind Rise of Remittances from Advanced Economies

Higher per capita remittances due to: Higher wages, especially in STEM, finance, and healthcare sectors.
Larger Indian diaspora of skilled professionals in Advanced Economies.
Educational migration ➝ professional settlement ➝ remittances.

UPSC PYQ

Q. In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis? (2019)