Foreign remittances to India play a vital role in strengthening the nation’s economy and providing necessities to its people. Holding on to its position as the top remittance-receiving country in the world, India received USD 79 billion in 2018 from Indian expats all over the world.
Analysing past trends, we can see that remittances to India stood at USD 65.3 billion in 2017 and USD 62.7 billion in 2016. These figures released by the World Bank are a clear indication of how foreign remittances to India are growing year by year. While the numbers show us clear facts, it is also essential to understand why the volume of foreign remittances to India is so high.
Well, there are two primary reasons why more and more expats send money to India:
Increase in the number of global Indian expats: Recent reports show over 17.5 million Indians are living abroad. The real numbers after including the floating migrant population could be far more. The Gulf region accounts for the majority of the Indian diaspora, followed by Western Europe, the US, and Canada. Regardless of whether the expats have blue-collar or white-collar jobs, most of them regularly send money home to their loved ones. Experts believe that the southern state of Kerala saw a significant rise in inward remittances as a result of disastrous floods. Expats across the globe sent more money to their loved ones to help them cope with the aftermath of the calamity. Stronger remittance flows in times of natural disasters have been a significant contributor to the increase in remittances to India.
Deep-rooted familial ties: Most Indians generally retain strong relationships with their home country, even after settling in a foreign country. Staying rooted in their culture and to their extended family plays a pivotal role in Indian expats sending home remittances regularly. Some studies believe that the amount of remittances most expats send home usually shrinks the longer they are away from the home country; statistics reinforce that Indians maintain a high flow of inward remittances compared to other expats.
Who remits the maximum amount of foreign exchange into India?
Indian expats in the Gulf region contribute a significant portion to the country’s total inward remittances. According to reports released in 2018, Indian expats in the UAE sent over USD 13,828 million back home. Other Middle Eastern countries recorded remittances to India amounting to USD 11,239 million from Saudi Arabia, USD 4587 million from Kuwait and USD 4143 million from Qatar.
The Middle Eastern countries have a significant population of blue-collared and white collared Indian expats. The families of blue-collared expats are heavily dependent on remittances and use the money for essentials including food, medicines, education and better housing.
US is the second-largest source of remittances to India. In 2018, the total remittances to India from the US stood at USD 11,715 million. The reason for this trend could be a stronger dollar and robust economic conditions in America.
Another common query that arises in the minds of remitters when they send money to India is whether remittances are taxable in India. To the benefit of remitters and thanks to the government’s initiative to increase remittances to India, international money transfers are not taxed. This is also because most remitters already pay taxes to the country where the income is earned.
What is the best way to send money to India?
There are a number of ways to send money to India. You can opt for one of the following:
Bank transfer: As long as the receiver has a bank account in their name, remitters can send money to India via bank account credit services. Recipients can either collect remittances from an ATM or initiate cash withdrawals at their bank. Moreover with Xpress Money you can now send bank transfers to India.
Cash transfer: Perhaps the oldest form of remittances in the world, cash transfers are a popular and secure method of money transfer. Since the rural population of the country is mostly unable to access banking facilities, cash transfers are a preferred channel of remittance services. Xpress Money has a network of 200,000 agent partner locations based across 170 countries that offer convenient cash transfer services.
Mobile wallets: This is the newest method to send money to India and is increasingly gaining popularity around the world. Mobile wallet services provide easy to access to remittances for anyone who has a phone and an internet connection. Mobile wallets facilitate instant money transfers from the comfort of your home.
Remittances to India is on the rise and is likely to increase further in the coming years. Several factors contribute to the increase in remittances, for example, higher-paying job prospects abroad, favourable currency exchange rates, global ties between countries, etc. As the world treads on the path of globalisation, cross border remittances are turning out to be a capable force in building economies.
If you’re looking for an affordable way to send money to India (or to any other country, for that matter), visit Xpress Money to know more.
