What’s in the news?
- Remittances to the country by non-resident Indians rose 26% on year to about $112.5 billion in FY23, underscoring the surge in demand for Indian professionals globally after the pandemic.
- Remittances to India were $89.1 billion in FY22. India continues to be the top recipient of remittances globally for the last several years.
- The latest data from the Finance Ministry indicates that the trend of sustained and fast-paced increase in “personal transfers” to India, which was interrupted during FY21 due to the pandemic, has not only resumed but also been buttressed.
- The surge in remittances is at a time when FDI flows across national borders seem to have slowed. Despite launching 14 production-linked incentive schemes, India attracted $70.97 billion FDI in FY23, down from 84.8 billion in FY22.
- The share of the 10 major countries in inward remittances to India, based on a survey conducted by the Reserve Bank of India for 2020-21, showed that the USA was the top source with a share of 23.4% in total remittances. It was followed by UAE with 18%, UK (6.8%), Singapore (5.7%) and Saudi Arabia (5.1%).
- Private remittances are a major boost to India’s current account, even as the country’s merchandise trade often results in a deficit.