This year, it’s expected that Indians who work and live overseas would remit a record sum home. A World Bank analysis released this week predicts that remittances to India will reach $100 billion, up 12% from the previous year. In the midst of efforts by foreign employers to entice skilled Indian talent with wage increases and post-pandemic high employment demand, the record remittances are expected to strengthen the finances of the world’s fifth largest economy. The increase in remittance inflows was aided by the rupee’s depreciation as well.
South Asia as a whole doesn’t follow the same trend. The World Bank warned that due to severe internal and external shocks, remittances made by migrants from Bangladesh, Pakistan, and Sri Lanka are anticipated to decline this year. According to a World Bank analysis, ‘migrants responded to exchange rate depreciations in home countries by transferring less money through legal channels and choosing black-market premia in the parallel exchange markets’.
Need for white-collar Indian workers overseas;
Indian white collar employees with advanced skills who reside in wealthy nations like the United States, United Kingdom, and Singapore are sending more money home, according to a World Bank analysis. Specifically in the Gulf area, which is where the majority of Indian migrants come from, Indians as a whole continue to make a significant move away from low-skilled blue collar professions and toward white collar ones.
From 26% in 2016–17, cash transfers to India from high-income nations increased to over 36% in 2020–21. According to the World Bank, which used Reserve Bank of India data, the share from the five Gulf nations—which includes Saudi Arabia and the United Arab Emirates—fell from 54% to 28% over the same time period.
Financial gaps must be filled by remittances;
India receives a sizable portion of its inflows of funds from the Indian diaspora. In the last year, the nation spent almost $100 billion of its foreign exchange reserves on efforts to combat the avian influenza pandemic and close the fiscal gap in the face of difficult international circumstances characterised by conflicts, a slowing economy, and the potential for an impending recession.
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