Remittances from Indians overseas totaled $71 billion in 2013, making India the top destination for a record 6 years in a row, reveals a recent report by the World Bank(WB). In 2012, India had received over $69.5 billion. China comes second again, with $60 billion remitted. Together, India and China make up nearly a third of total remittances to the developing world.
In 2012, India’s IT exports had totaled $69.7 billion.
Overall, developing nations received $414 billion this year, a 6.3% rise from 2012. The magnitude of such remittances is expected to reach $540 billion in 2016.
According to the Ministry of Overseas Indian Affairs, as of May 2012, around 21.9mn Indians were living abroad, with the USA being the preferred choice of more than 2.2 million Indians, followed by Saudi Arabia (1.78mn) and the UAE (1.75mn). Kerala, Gujarat, Maharashtra, and Punjab are the maximum inward-remittance generating states, according to the RBI. The largest remittances came from the UAE, at $15.6 billion, and USA ($11.9 billion) in 2012.
In recent months, the rupee has weakened considerably vis-à-vis the dollar, and a surge in remittances is expected as non-resident Indians take advantage of cheaper goods, services and assets back home, says the WB report.
Shedding light on the issue, Kaushik Basu, senior vice president and chief economist of the World Bank, said, “These latest estimates show the power of remittances. For Bangladesh, remittances provide vital protection against poverty. In terms of volume, India, with $71 billion of remittances, tops the global chart. To put this in perspective, this is just short of three times the FDI it received in 2012. Remittances act as a major counter-balance when capital flow. Also, when a nation’s currency weakens, inward remittances rise and, as such, they act as an automatic stabilizer.”
Remittances received by other developing countries were as follows: Philippines ($26 billion), Mexico ($22 billion), Nigeria ($21 billion), and Egypt ($20 billion). Other large recipients include Pakistan, Bangladesh, Vietnam, and Ukraine.