World Bank Predicts 50% Drop In Remittance Growth To India For 2024

According to the multilateral bank, remittance flows from the UAE to India, comprising 18 per cent of total remittances and being the second-largest source after the US

Remittance growth to India is projected to decrease to 3.7 per cent in 2024 from 7.5 per cent in 2023, according to the World Bank. However, the bank highlighted in its latest Migration and Development Brief that India's initiatives to integrate its Unified Payments Interface with countries like the United Arab Emirates (UAE) and Singapore are anticipated to lower costs and accelerate remittance transactions.

In 2023, India received remittances of $120 billion, bolstered by robust labour markets in the United States and Europe. The World Bank noted, “Reduced outflows from GCC (Gulf Cooperation Council) countries, amid declining oil prices and production cuts, contributed to the slowdown.” However, remittances are expected to see a slight increase to $124 billion in 2024 and further to $129 billion in 2025, indicating a potential for growth.

India retained its position as the leading recipient among countries receiving remittances, followed by Mexico at $66 billion, China at $50 billion, the Philippines at $39 billion, and Pakistan at $27 billion. Additionally, India maintained its status as the largest country of origin for emigrants, with a figure of 18.7 million, followed by Ukraine at 11.9 million, China at 11.1 million, Mexico at 11 million, and the Bolivarian Republic of Venezuela at 8.9 million.

The World Bank said, “The diversification of India’s migrant pool between a large share of highly skilled migrants employed mostly in high-income OECD (Organization for Economic Cooperation and Development) markets, and the less-skilled migrants employed in GCC markets is likely to lend stability to migrants’ remittances in the event of external shocks.”

According to the multilateral bank, remittance flows from the UAE to India, comprising 18 per cent of total remittances and being the second-largest source after the US, were bolstered by the February 2023 free trade agreement (FTA).

“The latter (FTA) established a framework to promote the use of local currencies for cross-border transactions and cooperation for interlinking payment and messaging systems between India and the UAE. The use of dirhams and rupees in cross-border transactions is instrumental in channelling more remittances through formal channels. In addition to the UAE, Saudi Arabia, Kuwait, Oman and Qatar account for 11 per cent of India’s total remittances,” it added.