Remittances from Indian diaspora hit record high! The overseas Indian community transferred $135.46 billion to India during the previous fiscal year, setting a new record. For over ten years, India has maintained its position as the leading recipient of diaspora remittances globally.The Reserve Bank of India’s latest balance of payments data indicates that gross inward remittances from non-resident Indians, shown as ‘private transfers’, increased by 14% compared to the year before. The financial inflows have seen significant growth, more than doubling from $61 billion in 2016-17.According to RBI statistics, remittances constituted over 10% of the total gross current account inflows, which amounted to $1 trillion for the fiscal year ending March 31.Additionally, an RBI research paper noted that India remains amongst the countries with lower costs for transferring US$200.
Trend in Gross Inward Remittances
“The strong growth in remittances has persisted despite weakness in crude oil prices,” said Gaura Sengupta, chief economist at IDFC First Bank according to an ET report. “This is a result of rising share of the skilled labour force migrating to developed markets such as the US, UK and Singapore. As per RBI data, these three countries account for a 45% share in total remittances,” she said, adding: “Meanwhile, the share of GCC countries has been reducing.“Also Read | Big remittance cheer for NRIs! US Senate draft of Donald Trump’s ‘One Big Beautiful Bill’ reduces remittance tax to 1% from 3.5%; details hereRemittances from Gulf Cooperation Council (GCC) nations are typically affected by oil prices.Software services and business services income represent significant current account inflows, with each surpassing $100 billion in the previous fiscal year. Combined with remittances, these three streams contributed to over 40% of the total gross current account inflows.“India’s remittance receipts have generally remained higher than India’s gross inward foreign direct investment (FDI) flows, thus establishing their importance as a stable source of external financing,” noted the report by RBI staff on a survey of remittances. These remittances substantially support India’s trade deficit financing. In FY25, gross inward remittances constituted nearly half (47%) of the country’s merchandise trade deficit of $287 billion.Also Read | Not just Apple iPhones! Android smartphone makers like Samsung, Motorola step up exports from India to US; move due to Trump’s tariff policiesWorld Bank data positions India as the leading recipient of inward remittances. In 2024, Mexico ranked second with estimated inflows of $68 billion, whilst China followed in third position with approximately $48 billion.Inward remittances globally represent cross-border household income flows, resulting from temporary or permanent migration to foreign economies. According to the International Monetary Fund’s 2009 definition, remittances appear in two balance of payments categories: compensation of employees under primary income account and personal transfers under secondary income account. For India, personal transfers, consisting mainly of inward remittances for family maintenance from overseas Indian workers and local withdrawals from non-resident deposit accounts, constitute the primary component of cross-border inward remittances, as detailed in a paper from RBI’s March 2025 monthly bulletin.
