India tops remittances table with US$ 125 bn inflows: World Bank report

India is anticipated to emerge as the foremost recipient of remittances in 2023, with an expected 12.4% increase to reach US$ 125 billion, according to a World Bank report released on Tuesday. Following India, Mexico is projected to receive US$ 67 billion, and China will follow with US$ 50 billion. The primary factors driving the growth in remittances for 2023 include a constrained labor market in the United States, substantial employment growth in Europe attributed to the extensive utilization of worker retention programs, and a mitigation of inflationary pressures in high-income countries.

The primary factors contributing to this increase are the diminishing inflation and robust labor markets in high-income source countries. These factors have stimulated remittances from highly skilled Indians in the United States, United Kingdom, and Singapore, collectively constituting 36% of the total remittance flows to India, as stated in the report.

Remittances to India have further gained from the bilateral agreement reached in February 2023 between India and the United Arab Emirates (UAE). The agreement aims to establish a framework promoting the use of local currencies for cross-border transactions and fostering cooperation in interlinking payment and messaging systems. Notably, Saudi Arabia, Kuwait, Oman, and Qatar contribute 11% to India's overall remittance inflows.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.