How the matrix of remittances is changing for Indians

India continued to remain the top receiver of remittances in 2017, getting funds of $69 billion, according to the World Bank. The previous two years had registered a dampening of outbound remittance flows from the Gulf Cooperation Council (GCC) countries due to policies discouraging the recruitment of foreign workers.

The rebound came on the back of high employment rates in the US as well as a steep rise in oil prices in the GCC countries. Indians in the United Arab Emirates (UAE) remitted the largest volumes of funds to India. The US, with thousands of skilled professionals, came second.

Keeping in mind the interests of the low-skilled Indian workers in the Gulf, from where roughly $37 billion remittances flowed into the country in 2017, the Reserve Bank of India is committed to keeping the cost of remittances low.

“A major concern is over the end-use of remittances and the fact that often the funds are used up for family commitments. To help workers meet future needs, financial institutions have to develop saving instruments,” TLS Bhaskar, researcher, India Centre for Migration, tells ET Magazine.

There are other challenges, too. Kerala, the state receiving the largest amount of remittances in the country, is seeing a slowdown in the number of migrants — from 24 lakh two years ago to 22 lakh in 2017. “There has been immigration crackdowns in various countries, including the US, Saudi Arabia and the UK,” says Irudaya Rajan S, professor at the Centre for Development Studies in Thiruvananthapuram and an expert on migration.

Overall, the order of countries that are sources of remittances to India have remained the same. But the demographics are changing. “In the last few years, the GCC countries have attracted more skilled workers, as compared with unskilled workers,” says Sudhesh Giriyan, COO of Xpress Money in Dubai.

Here is a break up of remittances Indians sent back home:
The average volume per each remittance for a blue-collar worker is $400, whereas it hovers between $1,500 & 2,000 for a white-collar worker
1. UAE

• Remittance: $13.8 billion
• Population of Overseas Indians: 2.8 million
• Per capita annual remittance: Rs 3.4 lakh

2. USA (White-collar remitters from western countries such as the US, remit money infrequently, depending on when they get good exchange rates)

• Remittance: $11.7 billion
• Population of Overseas Indians: 4.5 million
• Per capita annual remittance: Rs 1.8 lakh

3. Saudi Arabia

• Remittance: $11.2 billion
• Population of Overseas Indians: 3.3 million
• Per capita annual remittance: Rs 2.4 lakh

4. Kuwait

• Remittance: $4.6 billion
• Population of Overseas Indians: 0.9 million
• Per capita annual remittance: Rs 3.4 lakh

5. Qatar

• Remittance: $4.1 billion
• Population of Overseas Indians: 0.7 million
• Per capita annual remittance: Rs 4.1 lakh

6. United Kingdom

• Remittance: $3.9 billion
• Population of Overseas Indians: 1.8 million
• Per capita annual remittance: Rs 1.5 lakh

7. Oman

• Remittance: $3.3 billion
• Population of Overseas Indians: 0,8 million
• Per capita annual remittance: Rs 2.8 lakh

8. Nepal

• Remittance: $3 billion
• Population of Overseas Indians: 0.6 million
• Per capita annual remittance: Rs 3.4 lakh

9. Canada

• Remittance: $2.9 billion
• Population of Overseas Indians: 1 million
• Per capita annual remittance: Rs 1.9 lakh

10. Australia (It has been among the top 10 source countries in the past 2 years, becoming one of the most sought after destinations for Indians)

• Remittance: $2 billion
• Population of Overseas Indians: 0.5 million
• Per capita annual remittance: Rs 2.6 lakh

Per capita annual remittances calculated using exchange rate of Rs 68.6 to a $
Source: Ministry of External Affairs, Migration & Remittances of the World Bank Group, Xpress Money