Money spent abroad Total remittances to India have grown nearly 29-fold, from $1.1 billion in FY14 to $31.7 billion in FY24, driven primarily by tourism. Remittances from expatriate workers have grown 71% over the same period, from $70 billion to $120 billion. India continues to be the largest recipient of remittances, receiving $66 billion, nearly double that of Mexico.
According to a Bank of Baroda study, capital inflows into India have grown at a compound annual growth rate of 5.5% over the past decade, outpacing the global growth rate of 4%. The only country where remittances are growing at a faster compound annual growth rate than India is Mexico, at 10%, helping it overtake China for the second spot.
“Remittance outflows grew to $31.7 billion in FY24 from $1.1 billion in FY14, which represents a CAGR of over 40 percent, much higher than the CAGR of remittance inflows during the same period,” said Aditi Gupta, economist at BoB.The rise of the middle class has led to higher discretionary spending by households, which is reflected in higher savings, according to Gupta. Travel expenses In 2024, the BoB expects overseas capital inflows to continue to grow.
Global economic growth is expected to improve gradually, with the United States expected to remain resilient. Labor markets in the United States, the United Kingdom and the euro area remain strong, with unemployment rates near record lows, which bodes well for remittances. Additionally, remittance inflows from the Gulf Cooperation Council (GCC) countries appear to have slowed slightly, but stable oil prices should help remittance inflows from the region recover, the report said.
Looking at global remittance sources, the United States is the world’s largest source, accounting for more than 25% of the total global remittances in 2021, followed by the GCC countries at 17%. Besides these, Germany, the United Kingdom and Russia also make important contributions to global remittance flows.