Remittance flows to India increased by 24 per cent to reach $111 billion in 2022, World Bank (WB) mentioned in its latest Migration and Development report on remittances to low- and middle-income countries. The bank previously reported that the India topped the list of the recipient countries for remittances in 2022, followed by Mexico, China, the Philippines, and Pakistan.

According to the latest report,the 8 per cent surge in remittances to India in 2021 and the record 24.4 per cent rise in 2022 accounted for 63 per cent of South Asia’s total remittance flows. In 2022, total remittance to India made up for 3.3 per cent of the country’s GDP, the report highlighted.

In its observations, WB cited two factors for the unprecedented hike in remittances. According to the bank, almost 36 per cent of India’s remittances came from high-skilled and largely high-tech Indian migrants in three high-income destinations. These destinations include the United States, the United Kingdom, and Singapore, where the post-pandemic recovery led to a tight labour market and wage hikes that boosted remittances.

Subsequently, the report observed that India’s other high-income destinations also enjoyed favourable economic conditions.  The report mentioned that the high energy prices favoured employment and incomes of the less-skilled Indian migrants in the GCC countries, while the GCC governments’ special measures to curb food price inflation boostedthe migrants’ remitting potential. As a result, remittance inflows from the GCC countries, which account for about 28 per cent of India’s total remittance inflows, also soared in 2022.

As per the WB’s estimation for 2023, officially recorded remittance flows to low- and middle-income countries (LMICs) are estimated to grow by 1.4 per cent to $656 billion in 2023.  For slow but resilient growth, WB reasoned that the economic activity in remittance source countries is set to soften, limiting employment and wage gains for migrants.