Economic Survey 2024: Remittances Expected To Surge 3.7 Per Cent To $124 Billion In 2024

Economic Survey 2024: The World Bank notes that India has the largest emigrant population and is the top remittance recipient country, with remittances hitting $120 billion in 2023

Net services receipts rose from $143.3 billion during 2022-23 to $162.8 billion in 2023-24, primarily due to rising exports of software, travel, and business services.

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Remittances to India, the second largest source of external financing after service exports, are projected to grow by 3.7 per cent to $124 billion in 2024 and by 4 per cent to reach $129 billion in 2025, according to the Economic Survey released on Monday. The Economic Survey, tabled in Parliament by Finance Minister Nirmala Sitharaman, highlighted that India’s primary source of remittances is oil-exporting countries. The World Bank notes that India has the largest emigrant population and is the top remittance recipient country, with remittances hitting $120 billion in 2023.

“The outlook for remittance in India for 2024 is strong, with the expectation that remittance growth will moderate to 3.7 per cent, taking levels to $124 billion in 2024,” the Economic Survey stated. The diversification of India’s migrant pool, which includes a significant share of highly skilled workers in high-income OECD markets and less-skilled migrants in GCC markets, is likely to lend stability to remittances in the event of external shocks.

“India’s efforts to link its Unified Payments Interface (UPI) with source countries such as the United Arab Emirates and Singapore are expected to reduce costs and speed up remittances,” the Survey added.

In 2023, the increase in remittances was driven by declining inflation and strong labour markets in the United States and Europe — the largest destinations for India’s skilled migrants — and other OECD destinations, as well as positive demand for skilled and less-skilled workers in GCC countries.

Net services receipts rose from $143.3 billion during 2022-23 to $162.8 billion in 2023-24, primarily due to rising exports of software, travel, and business services.

The Survey also noted that remitters benefit when the rupee depreciates against foreign currencies such as the UAE's Dirham, the US Dollar, and the British Pound, as the value of remittances increases in rupee terms.

For every dollar earned abroad, a worker returns an augmented amount after conversion according to the exchange rate of the country they work in, thus exhibiting a positive association with exchange rate movements.