US tops UAE in remittances to India

US tops UAE in remittances to India

Recently the central bank economists showed that the US surpassed the UAE as the top source country, accounting for 23% of total remittances in 2020-21.

Inward Remittance to India

  • The share of the Gulf Cooperation Council (GCC) region in remittances to India was more than 50% in 2016-17. In the year 2020-21, it came down to about 30%.
  • Maharashtra has overtaken Kerala in terms of receiving maximum remittances.
  • The share of Kerala, Tamil Nadu and Karnataka was almost halved in the year 2020-21. Their share in the total remittances has been reduced to only 25% since 2016-17.

Reason for the change in the remittance source country-

  • The migration of Indians to developed countries has increased.
  • More skilled white collar workers predominate among those who migrate to the United States, the United Kingdom, Canada, and South Africa.
  • Migration from India to GCC countries has reduced in the last five years due to the economic slowdown.

It has the following factors:

  • Sluggish oil prices in gulf countries
  • Strict labor laws,
  • Excess fee for work permit renewal,
  • Higher rates of taxes etc.

Gulf countries are also working on alternatives other than oil revenue. In these options, they are giving priority to their citizens over migrants in employment.

According to the Migration and Development Brief of the World Bank, India received the maximum remittances in the year 2021.

Source – The Hindu

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