Overseas Indians sent home a whopping $135B in FY25
What's the story
The Indian diaspora sent a record $135.46 billion in remittances during the last fiscal year, according to RBI. This marks a 14% increase from the previous year and solidifies India's position as the world's largest recipient of such funds. The US, UK, and Singapore are major contributors to these remittances, which now cover a significant portion of India's trade deficit. Economists see these inflows as a stable source of external funding that strengthens the balance of payments and supports INR.
Growth trajectory
Remittances more than doubled in last 8 years
The inflow of remittances to India has more than doubled in the last eight years, from $61 billion in 2016-17. According to RBI data, these remittances accounted for over 10% of the gross current account inflows of $1 trillion for the fiscal year ending March 31. The growth is largely attributed to an increase in skilled labor migration to developed markets such as the US, UK, and Singapore.
Financial stability
Nearly half of India's merchandise trade deficit
A report by RBI staff on a survey of remittances noted that India's remittance receipts have generally surpassed its gross inward foreign direct investment (FDI) flows. This highlights their importance as a stable source of external financing for the country. In FY25, gross inward remittances accounted for nearly half (47%) of India's merchandise trade deficit of $287 billion, underscoring their significance in balancing the nation's finances.