08-04-2025
UAE-India remittances see steady growth as investment becomes key driver
Remittances sent to India by UAE residents have continued to rise steadily in recent years. However, according to an industry expert, the motivation behind these money transfers has undergone a significant shift over the past decades.
'Earlier, people used to send money (primarily) for home maintenance,' said Adeeb Ahamed, managing director of Lulu Financial Holdings. "Now, investment has become the key priority. The purpose of remittances has largely changed.'
Adeeb explained that one of the reasons for this shift is the growing sense of stability and long-term settlement in the UAE. He said that many now feel comfortable staying in the UAE.
"(As a result), we are seeing more home-buying happening in UAE rather than back in India,' he said. 'This means a larger portion of remittances is now directed towards investments in India."
He shared these insights while speaking to Khaleej Times on the sidelines of the Dubai-Indian Business Forum, which kicked off in Mumbai, India on Tuesday.
The forum coincided with the official visit of Dubai Crown Prince Sheikh Hamdan to India — his first state visit to the country.
Organised by Dubai Chambers, the forum brought together over 200 participants, including prominent entrepreneurs from India and the UAE, to explore ways to enhance trade and partnership opportunities.
Focus on investments
Adeed noted that a significant portion of remittances is now being funnelled into India's stock market. 'The last 3-4 years have been very strong for the stock market in India and have given good returns on investment,' he said. 'Many UAE residents have invested in the stock market and created a passive income for themselves. The real estate market is also fairly good in many regions, so, they have invested into that sector as well.'
India was the largest recipient of remittances from the UAE last year, while the UAE stood as the third largest source of remittances to India. 'This year, the UAE is poised to become the second largest corridor for remittance into the country.'
During a panel discussion at the forum, Adeeb — who also serves as the Chair of the Federation of Indian Chambers of Commerce and Industry (FICCI) - Arab Council — highlighted how a lack of accessible information had previously hindered UAE-based businesses from exploring Indian investment opportunities.
However, that trend is changing, thanks to the India-UAE Comprehensive Economic Partnership Agreement (CEPA) which came into force in 2022.
