After a brief slump last year, non-resident Indians are back to sending money home by the bucketload.
In 2017, India is expected to receive $65 billion (Rs424,222 crore) from the diaspora, the World Bank said on Oct. 03. The country will, therefore, remain the world’s top recipient of remittances. The other four leading remittance magnets are China, the Philippines, Mexico, and Pakistan.
In 2016, remittances to India registered a sharp drop of nearly 9%, mainly on account of lower crude oil prices that hit the Gulf Cooperation Council (GCC). The six GCC nations—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—account for a significant share of remittance inflows into India.
The south Asian nation was, nonetheless, able to hang on to its position. The $62.7 billion it received in the last financial year accounted for 2.9% of its GDP. The situation has improved since, but the spectre of weak oil prices still looms.
“Remittance growth in the south Asia region is expected to remain weak with a modest 1.1% growth in 2017 due to the continuing impact of lower oil prices and ‘nationalisation’ policies leading to constrained labour market conditions in the GCC,” the World Bank said in its report.
The nationalisation policies being implemented by many GCC nations are aimed at creating jobs for their native-born populations, in turn restricting those for foreign workers. Remittances from Saudi Arabia, for instance, declined by 8% between January and July 2017, compared to the same period in 2016.