The remittances into India continue to be the highest. In 2023 rose 12.3% to $125 billion, according to estimates released by the World Bank. This accounts for 3.4% of India's total gross domestic product. The remittances are expected to go over its previous estimates by $14 billion in 2023. In 2022, India's inward remittances stood at $111.22 billion.
India is followed by Mexico that received $67 billion and China whose remittance accounts ford $50 billion.
The growth in remittances in India has also pushed the inward remittances in South Asia. In the last 10 years the inward remittances to India have jumped 78.5%. In 2013, they stood at $70.38 billion. They crossed the $100 billion mark in 2022 when the inward remittances jumped 24.4% to $111.22 billion.
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According to the data, the growth of remittances was highest in Latin America and the Caribbean (8%), followed by South Asia (7.2%) and East Asia and the Pacific (3%). India holds about 66% of all remittances to South Asia, higher than 63% in 2022.
In 2023, the total remittances to low and middle income countries also grew an estimated 3.8% while the World Bank has said that it is expected to soften to 3.1% in 2024. The dip is due to the risk of a decline in real income for migrants in the face of global inflation and low growth prospects.
An important contributing factor was declining inflation and strong labour markets in high-income source countries, which boosted remittances from skilled Indians in the United States, United Kingdom, and Singapore.
The higher inflow from Gulf Cooperation Council (GCC), especially the United Arab Emirates, which accounts for 18% of India's total remittances, the second-largest source after the United States is another factor for the rise in remittance.
"Remittance flows to India benefited particularly from its February 2023 agreement with the United Arab Emirates for establishing a framework to promote the use of local currencies for cross-border transactions and cooperation for interlinking payment and messaging systems," the report said.
The low remittance cost in South Asia is also a reason for the rise in remittance.