India is the Top Remittance Receiving Country in 2015


Remittance refers to the fund an expatriate send to their land of origin via wire, mail or online transfer. These peer to peer transfers of funds across borders are economically important for many countries as it acts as a pivotal role in the development of their Gross Domestic Product (GDP). Remittances, specifically, have played an essential part in the evolution of economies of small and developing nations.[1] The impact of remittances is recognized in all developing regions of the universe, forming an important stream of foreign currency to most states and directly reaching millions of families – around 10 percent of the world’s population.[2]

India has kept its status as the world’s top recipient of officially recorded overseas remittances in 2015. In India, the remittance market is run by the commercial banks, foreign exchange bureaus, cooperative banks, as well as India Post, along with various commercial agents who link up with different exchange houses which help in the money transfer from the foreign state to India. They provide with different exchange rates applicable at that time and assist in the smooth transfer of wealth across regions. Remittances to India increased to $10,827.88 million in the third quarter of 2015 from $49,887.12 million in the second quarter of 2015.[3] Even though there is no uniform pattern in expats remittances, on an average India is estimated to have received around Rs 35,000 – 40,000 crore every month.[4] The impact of remittances on India is of relative importance when likened to some economic and fiscal indicators. For instance, in 2004-2005, the state and federal governments in India combined spent less money on education than India received in remittances, according to the data available from India’s Ministry of Finance. Moreover, in the same year, combined state and federal government expenditures on health care came to less than half of the remittance flow.[5]


Indians working outside of India have more money in their bank accounts than the migrants from most states. The World Bank report for the first time gave estimates on diaspora savings and mentioned that Indians have about $44 billion stocked away in savings in the lands in which they operate.[6] Depreciation in the value of the rupee has brought cheers to the 2.5 crores strong Non-resident Indians (NRIs) population across the globe. For instance, the domestic currency was cheaper by over 9 per cent against the US dollar when compared to the same period in 2014. Due to this, remittances have increased by 15-20 percent in 2015.[7] Another factor that contributed towards the rise in remittances in India over the years is the extensive economic reforms of the early 1990s provide a meaningful context. The economic liberalization, which began in 1991, has been dubbed by some as “India’s second independence”.[8] The increase in remittances is also due to the following elements:

  • The Indian government offers various deposit schemes and bonds for NRIs, such as the Money Transfer Service Schemes (MTSS) and the Rupee Drawing Agreements (RDA), with attractive interest rates.[9]
  • Another factor is the increased possibilities to remit in India. The increased competition between money transfer agencies resulted in lower costs per transaction and better incentives to remit for migrants. This development has contributed to the growth of remittances to India.[10]

To speak of trends, Indian migration to the United States has been increasing over the years due to the use of H-1B temporary worker visas, which allow those in professional or formal occupations to work in the country for up to six years with the possibility of receiving permanent residence. Hence, Indian software engineers became an important component of the USA Information Technology (IT) industry and their ancillary services. This change in patterns of immigration has led to a significant shift in the source regions of remittances to India. According to RBI, North America has replaced the Gulf States as the largest source of remittances.[11]

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[1] Remittance Definition | Investopedia. (2005, June 23).

[2] Sending money home: Worldwide remittance flows to developing countries [International Fund for Agricultural Development]. (n.d.).

[3] India Remittances | 2010-2016 | Data | Chart | Calendar | Forecast | News. (n.d.).

[4] Thomas, P. (2015, August 30). India Gets Remittances Boost. The New Indian Express.

[5] Chisti, M. (2007, February 1). The Rise in Remittances to India: A Closer Look [Web log post].

[6] Bellman, E. (2015, August 15). India Wins the Remittance Race Again. The Wall Street Journal.

[7] Thomas, P. (2015, August 30). India Gets Remittances Boost. The New Indian Express.

[8] Chisti, M. (2007, February 1). The Rise in Remittances to India: A Closer Look [Web log post].

[9] Lorier, D. (2010). The Effect of Remittances on Economic Growth in India (Unpublished master’s thesis). Universiteit van Amsterdam.

[10] Ibid.

[11] Chisti, M. (2007, February 1). The Rise in Remittances to India: A Closer Look [Web log post].