India received a record $135.46 billion in remittances in the last fiscal year, continuing its streak as the world’s top remittance recipient for over a decade. This 14% surge was driven largely by skilled Indian professionals migrating to countries like the United States, United Kingdom, and Singapore.
Major Share from Developed Countries
According to Reserve Bank of India (RBI) data, the US, UK, and Singapore collectively accounted for 45% of all remittances sent to India. In contrast, the share from Gulf Cooperation Council (GCC) countries has been declining, partly due to fluctuating oil prices which traditionally impact migration and remittance flows from the Gulf region.
Significant Contribution to India’s Current Account
Remittances formed over 10% of India’s gross current account inflows, which totaled $1 trillion in the fiscal year ending March 31. These inflows are recorded under ‘private transfers’ in RBI’s balance of payments data.
Remittance Inflows Have More Than Doubled in Eight Years
The growth in remittances has been steady and strong. In 2016–17, India received $61 billion. That figure has more than doubled, reinforcing the increasing financial contribution of the global Indian diaspora.
Supports Trade Deficit and External Financing
An RBI research paper emphasized the role of remittances in stabilizing India’s external accounts. In FY25, gross inward remittances covered nearly 47% of India’s merchandise trade deficit, which stood at $287 billion. In many years, remittance inflows have surpassed foreign direct investment (FDI), highlighting their importance as a reliable source of external financing.
Global Context of Remittance Flows
World Bank data shows India leading in remittance receipts globally, with Mexico and China trailing far behind at $68 billion and $48 billion, respectively. Globally, remittances represent income transferred by migrants to their families across borders, classified by the IMF under compensation of employees and personal transfers in the balance of payments.
Low Cost of Transfers Encourages Inflows
India remains one of the more cost-effective destinations for transferring money. The RBI also highlighted that the cost of sending $200 to India remains lower than many other countries, encouraging consistent inflows from overseas workers.
Combined Financial Streams Strengthen India’s External Accounts
Alongside remittances, software services and business services each contributed over $100 billion to current account inflows. Together, these three streams made up more than 40% of India’s gross current account receipts in the last fiscal year.
Remittances Remain Vital for India’s Economic Stability
Despite global economic uncertainties and volatile oil prices, India’s remittance figures continue to grow, supported by the rising share of its skilled workforce abroad. These inflows remain crucial in financing the trade deficit and providing a stable cushion for the country’s external sector.
