According to the RBI's March Bulletin, India’s remittances have more than doubled from US$ 55.6 billion in 2010-11 to US$ 118.7 billion in 2023-24.
While financing around half of India’s merchandise trade deficit, net remittance receipts have been an important absorber of external shocks during this period.
Moreover, India’s remittance receipts have generally remained higher than India’s gross inward foreign direct investment (FDI) flows, thus establishing their importance as a stable source of external financing.
Furthermore, following a pandemic-induced contraction of 3.6 per cent during 2020-21, remittances to India in the post pandemic period (2021-22 to 2023-24) recorded a resurgence with an average annual growth of 14.3 per cent.
The results of the sixth round of the survey on India’s remittances for 2023-24 highlight the changing dynamics of India’s diaspora from the GCC countries as the pre-dominant source economies to the advanced economies. State-wise data revealed that Maharashtra remained the largest recipient, followed by Kerala, Tamil Nadu, Telangana and Karnataka.
The weighted average cost of sending remittances for amounts less than US$ 200 was the highest amongst all the transaction brackets recorded in the survey. Importantly, on an average, 73.5 per cent of total remittances received by the MTOs were through digital mode during 2023-24.
The cost of sending remittances to India is lower than the global average cost, driven by digitalization but remains higher than the SDG target of 3 per cent for US$ 200. Furthermore, fintech companies offer affordable cross-border remittance services, fostering competition among different remittance service providers.