The money sent by non-resident Indians to their families back home in India is important. At a time when the Indian rupee was in a free fall, remittances in foreign exchange from non-resident Indians grew rapidly. This helped the rupee stabilize and regain some strength.
Here are some facts about remittances:
1. India is the biggest recipient of foreign remittances from non-residents. In 2012, non-resident Indians wired $71 billion to India. At a time when India owed a significantly high amount of foreign currency to the world due to rising imports of oil and gold, these remittances came as a relief. Exports are another source of income in foreign exchange for a country. However, India’s current account deficit rose sharply as exports fell too. This resulted in the rupee falling. Foreign remittances continued to grow steadily.
2. Kerala receives the highest amount of foreign remittances among Indian states at $11.3 billion in 2012, according to UAE Exchange, an Abu Dhabi based company that claims a 10% market share in global remittances to India. The firm noticed that non-resident Indians borrowed money in UAE and remitted it to India.
3. Tamil Nadu comes second accounting for 13% of remittances, followed by Punjab at 6%. Tier III cities in Uttar Pradesh and Bihar are also witnessing a significant rise in remittances. The growth in these states is as high as 25%, according to UAE Exchange.
4. For the quarter to June 2013, remittances were at $16.4 billion, the highest in five straight quarters, according to Reserve Bank of India data. A weak rupee is expected to drive further remittances to India. “Inflation has to be controlled in India,” said Promoth Manghat, VP-Global Operations, UAE Exchange while calling the economic slowdown in India ‘a temporary phase’.
5. Global remittances stood at around $414 billion in 2012, according to the World Bank data. In 2013, worldwide remittances are expected to go up to $550 billion. The World Bank predicts that this could go up to $700 billion by 2016.
At $71 billion, India tops global remittances list
Developing countries that received most remittances in 2012
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