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Remittances sent by Indians living abroad reached a historic high of $29 billion.


April 1 :
With remittances of US$29 billion in the December quarter, overseas Indians broke their previous record. Rising returns from FCNR (foreign currency - non-resident) instruments have made them more attractive than Western bank deposits, which is why people are choosing them as a savings plan, leading to an increase in remittances.

In contrast to repatriable NRI deposits, remittances are a steady stream of inflows that are essential in lowering the CAD. Partially as a result of the consistent influx of remittances, the CAD has gradually shrunk over time relative to India's GDP. Reserve Bank of India (RBI) preliminary data shows that net inward remittances, as measured by private transfers in the current account of the balance of payments, were US$29 billion for the quarter ending in December 2023.

The job situation and the amount of migration in different economies are highly correlated with remittances. After COVID-19, the RBI surveyed remittances and found that 23% of all remittances come from the US, making it the top source. On the other hand, there was a decrease in remittance flows from the Gulf region.

Since the software boom of the 1990s, when India's technical talent landscape was transformed, the nation has remained the top beneficiary of remittances sent by its diaspora. The third-largest economy in Asia is predicted to have received more than US$100 billion in remittance inflows in 2023, according to estimates from the World Bank.

The majority of these funds are used to support families, although some are put into other assets like accounts, according to a study on remittances conducted by the RBI. According to a study of balance of payments statistics, the current account deficit (CAD) decreased to 1.2% of GDP in the December quarter from 2.2% in the December 2022 quarter, thanks in part to a boost in remittances and a surge in exports of services.