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India is the world's top receiver of migrant remittances. An estimated $27.1 billion was remitted to India in 2006-2007. India was followed by, China ($25.7 billion), Mexico ($25 billion), the Philippines ($17 billion)and France ($12.5 billion).
Growth of Remittances - money sent home by immigrant workers abroad-in India has been dramatic. Flows into the country have grown dramatically in recent years, touching up from some US$2 billion a year in the late 1980s Total remittances has grown steadily over the past 15 years, and dramatically in the past 10, skyrocketing from $2.1 billion in 1990-1991 to US$ 17.4 billion in 2003 and further to $27.1 billion in 2006-2007.
India has now captured one-tenth of global remittance flows. For 2007, recorded remittances flows worldwide are estimated at $318 billion,of which $240 billion went to developing countries. Rich countries are the main source of remittances. The United States is by far the largest, with $42 billion in recorded outward flows in 2006. Saudi Arabia ranks as the second largest, followed by Switzerland and Germany. Though measures to curb money laundering and terrorist financing have brought more transfers into the official fold, actual amounts remain much larger than officially recorded figures as informal remittance systems such as hawala elude data collection.
According to policy experts, factors responsible for the growth in remittances include the diminishing role of unofficial channels, shifting emigration patterns to high-skilled technology jobs, greater competition in the money transfer market and the strength of the Indian economy.
The top 10 destination countries for Indians include the UAE, Saudi Arabia, US, Bangladesh, Nepal, UK, Sri Lanka, Canada, Kuwait and Oman. Experts point out that softer immigration laws in the US and the search for better economic opportunities fuelled a surge in the overseas migration of Indians.
Unlike previous phases of migration, emigration sent better educated Indians in the last decade especially to the US, UK and Canada.
A recent JP Morgan study said that deposits by non-resident Indians (NRIs) amounted to around $32 billion or 23% of foreign exchange reserves. Portfolio and real estate investment has been largely concentrated in the IT space. While the report noted that the diaspora could act as a "powerful catalyst", even helping India realise and perhaps exceed its aspiration of 10% annual growth, the onus for better capitalisation lies on the Indian government.
According to the World Bank, Workers' remittances undoubtedly help ease poverty and improve living standards in their home countries by enabling better health care, nutrition, housing, and education. In many communities, however, the money is often put to unproductive uses such as buying land and building houses.
Remittances have contributed to sharp increases in agricultural production - a green revolution - in India by enabling farmers to purchase tractors and machinery.
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| Countries receiving the most remittances, 2006-07(US$ billion) |
| India |
27.1 |
| China |
25.7 |
| Mexico |
25 |
| Philippines |
17 |
| France |
12.5 |
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