According to the World Bank’s Migration and Development brief, remittance flows to India are predicted to increase by 12 percent and hit $100 billion for the first time in 2022, way ahead of Mexico, China, and the Philippines.
Key points
- This will help India maintain its top spot. With a share of 23% of total remittances, the U.S. surpassed the United Arab Emirates as the top source country in 2020-21.
- Remittances to India were enhanced by wage hikes and a strong labor market in the United States and other OECD countries.
- Cash transfers to India from high-income countries climbed to more than 36% in 2020-21, up from 26% in 2016-17.
- The share from five Gulf countries, including Saudi Arabia and the United Arab Emirates, declined to 28% from 54% in the same period.
- Remittances are an important source of income for households in low- and middle-income countries as it helps in reducing poverty and promoting resilience while also improves birth weight of newborns and school enrollment rates for older children.
- According to World Bank, studies show that remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters.
