According to World Bank forecasts, inward remittances to India will increase 12.3 percent to $125 billion in 2023, accounting for 3.4 percent of India's GDP. India's inward remittances will total $111.22 billion in 2022. India's inward remittances are likely to exceed prior predictions by $14 billion in 2023.
According to the World Bank's "Migration and Development Brief" released on Monday, India remains the top beneficiary of remittances internationally, followed by Mexico ($67 billion) and China ($50 billion).
India's huge receipts encouraged inward remittances to South Asia. Remittance increase was highest in Latin America and the Caribbean (8%) followed by South Asia (7.2%) and East Asia and the Pacific (3%), according to the report. India presently accounts for about 66% of all remittances to South Asia, up from 63% in 2022.
Total remittances to low- and middle-income countries (LMICs) are expected to increase by 3.8% in 2023. According to the World Bank, it is predicted to fall to 3.1% in 2024, owing primarily to the likelihood of a reduction in real income for migrants in the face of global inflation and low economic prospects.
Furthermore, inward remittances to India have increased by 78.5 percent in the recent decade. They were worth $70.38 billion in 2013. They passed the $100 billion threshold in 2022, when inward remittances increased by 24.4% to $111.22 billion. Falling inflation and solid employment markets in high-income source nations boosted remittances from skilled Indians in the United States, the United Kingdom, and Singapore. These three countries contribute 36% of all remittances to India.
Another aspect was increased inflows from the Gulf Cooperation Council (GCC), particularly the United Arab Emirates, which accounts for 18% of India's total remittances, ranking second only to the United States.
"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," according to the research. "The use of dirhams and rupees in cross-border transactions would be instrumental in channeling more remittances through formal channels."
Another significant element was the low cost of remittances in South Asia. In the second quarter of 2023, the cost of sending $200 to South Asia was 4.3 percent cheaper than the global average of 6.2 percent. In reality, the cost of remittances from Malaysia to India is the lowest in the world, at 1.9 percent.
According to the World Bank, India's remittance prognosis for 2024 is favorable. However, remittance growth is forecast to slow to 8%, bringing total remittances to $135 billion. "This trend will be shaped by labor market conditions and inflation in the main host economies for its high- and less-skilled migrants," the report said.
