India Receives $87 billion in Remittances in 2021

India received $87 billion (INR 5788 billion) in remittances in 2021 with the United States accounting for over 20% of these funds as per the World Bank’s Migration and Development Brief. The resolve of migrants to support their families over the pandemic, aided by economic recovery in Europe and the United States, and the fiscal stimulus and employment support programs have contributed to this strong growth in remittance. This robust return is in line with the resilience of remittance transfers the previous year, where a decline of only 1.7% was recorded despite a severe global recession brought about by COVID-19.

In 2022, remittances are projected to grow by 2.6%, in line with global macroeconomic forecasts, and reach $89.6 billion for India. This reflects a decline in the overall migrant stock, as a large proportion of returnees from the Arab countries wait to return. Remittances to low- and middle-income countries are projected to have increased to 7.3% and reach $589 billion in 2021. India is followed by China, Mexico, the Philippines, and Egypt in terms of overall remittance received.

As per the report, South Asia has the lowest average remittance costs at 4.6%. However, sending money to the region through official channels is expensive as compared to informal channels, which continue to remain popular. Policies that aim at reducing these costs would result in a win-win situation for the migrants and governments of the regions alike.

However, a resurgence of a new wave of COVID-19 cases and the subsequent mobility restrictions pose the biggest risks to the outlook for global growth, employment, and remittance flows to developing countries.