Have Remittances by Indians Working Abroad Reached a Record High of $135 Billion in FY25?
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Synopsis
The recent surge in remittances from Indians abroad signals a strong economic rebound, with the fiscal year 2024-25 witnessing a record of $135.46 billion. This significant growth showcases the resilience of the Indian workforce globally and the increasing importance of remittances to the nation's economy.
Key Takeaways
- Record remittances from Indians abroad reached $135.46 billion in FY25.
- The remittances grew by 14 percent compared to the previous year.
- India remains the top recipient of global remittances in 2024.
- Gulf countries host about 50 percent of Indian migrants worldwide.
- Tax rates on remittances were reduced to 1 percent under new legislation.
Mumbai, July 1 (NationPress) The remittances sent back home by Indians working overseas have experienced a remarkable rise of 14 percent in the financial year 2024-25, hitting a historic high of $135.46 billion, as per data from the RBI.
The Reserve Bank of India noted that these inflows, categorized as “private transfers”, constituted over 10 percent of India’s gross current account flows, which totalled $1 trillion in FY25.
For the January-March quarter of 2024-25, personal transfer receipts, primarily consisting of remittances from Indians abroad, increased to $33.9 billion, up from $31.3 billion in the same period last year, according to RBI data.
In 2024, Indians working overseas sent home a record $129.4 billion, with the peak inflow of $36 billion occurring in the October-December quarter.
India leads the global remittance rankings for 2024, significantly ahead of Mexico, which received $68 billion, and China, which received $48 billion. The Philippines followed with $40 billion and Pakistan with $33 billion, as reported by World Bank economists.
Remittance growth is projected at 5.8 percent for the 2024 calendar year, a sharp increase from the 1.2 percent growth recorded in 2023, based on World Bank data.
The number of Indians living abroad has surged from 6.6 million in 1990 to 18.5 million in 2024, with their share of global migrants rising from 4.3 percent to over 6 percent during this period. Notably, around half of these Indian migrants reside in Gulf countries.
The rebound of job markets in high-income nations, particularly in the Organisation for Economic Co-operation and Development (OECD), post-Covid-19 pandemic, has significantly driven remittances. This is particularly evident in the United States, where employment among foreign-born workers has rebounded and is now 11 percent higher than pre-pandemic levels seen in February 2020.
In a positive development for Indian professionals in the US and Non-Resident Indians (NRIs) remitting money back home, the revised draft of the One Big Beautiful Bill Act, proposed by President Donald Trump, has slashed the tax rate on remittances to 1 percent from the initially proposed 5 percent.
Additionally, software and business services contributed significantly to India's current account inflows in FY25, with each generating over $100 billion. Together with remittances, these three sectors made up more than 40 percent of total current account receipts, aiding in maintaining India's current account deficit.
Point of View
It is clear that Indian migrants play a vital role in sustaining the nation's economic framework. As the country continues to leverage this influx of foreign currency, it is essential to recognize the contributions of these individuals to both their families and the broader economy. The trend showcases the interconnectedness of global economies and the vital importance of supporting our diaspora.
NationPress
01/07/2025
Frequently Asked Questions
What are remittances?
Remittances are funds transferred by individuals working abroad to their home country, often to support family members or contribute to local economies.
How much did remittances from Indians abroad increase in FY25?
In FY25, remittances from Indians working abroad rose by 14 percent to a record $135.46 billion.
Which country received the highest remittances in 2024?
India topped the list of recipient countries for remittances in 2024, receiving $129.4 billion.
What factors contribute to the growth of remittances?
Factors such as the recovery of job markets in high-income countries and the increasing number of Indian professionals abroad contribute to the growth of remittances.
What is the significance of remittances for India's economy?
Remittances play a crucial role in supporting India's economy by contributing to the current account balance and providing financial support to families.
