Diaspora remittances hit new record at $135.46 bn in FY25

Time of India

a day ago

The
Indian diaspora
sent home $135.46 billion in the last fiscal year, the highest on record. According to latest balance of payments data released by the Reserve Bank of India, gross inward remittances by overseas Indians, as reflected in 'private transfers', were 14% higher from the previous year.
India has been the biggest recipient of
diaspora remittances
for more than a decade now. The inflows have more than doubled in eight years — from $61 billion in 2016-17.
RBI data show that remittances accounted for over 10 % of the gross
current account inflows
of $1 trillion during the fiscal year ended March 31.
'The strong growth in remittances has persisted despite weakness in crude oil prices,' said Gaura Sengupta, chief economist at
IDFC First Bank
. '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.'
Oil prices often influence remittances from countries of the Gulf Cooperation Council (GCC).
Moreover, India continues to remain one of the low-cost countries for sending US$200, an RBI research paper said.
The other major sources of current account inflows are software services income and business services income, each crossing $100 billion last fiscal year. Together the three (remittances, software and business services) accounted for more than 405 of the 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 a report by RBI staff on a survey of remittances. Besides, they are a major source of funding for India's trade deficit. In FY25, gross inward remittances were nearly half (47%) of the country's merchandise trade deficit of $287 billion.
India has been the largest recipient of inward remittances, according to World Bank data. In 2024, Mexico was at a distant second position with inflows estimated at $68 billion. China was third at an estimated $48 billion.
Globally, inward remittances represent the flow of cross-border household income, arising from the temporary or permanent movement of people to foreign economies. Moreover, as defined by the International Monetary Fund in 2009, two items in an economy's balance of payments statistics relate to remittances — compensation of employees under primary income account and personal transfers under secondary income account. In the case of India, personal transfers, primarily comprising inward remittances for family maintenance from Indian workers residing abroad, and local withdrawals from non-resident deposit accounts, form the major portion of cross-border inward remittances, noted a paper published in RBI's March 2025 monthly bulletin.