India’s global diaspora continues to be a powerful source of economic support, as fiscal year 2025 closed with a record $135.46 billion in remittance inflows. The double-digit growth reinforces the nation’s position as the top global remittance recipient, as overseas Indians play a vital role in stabilising external finances and narrowing the trade gap.
As per data from the Reserve Bank of India, private transfers from overseas Indians stood at $135.46 billion for the year ended March 31, a 14% year-on-year rise. These transfers, grouped under the current account as personal transfers, include family maintenance and withdrawals from non-resident deposit accounts. India's remittance inflows have doubled in eight years from $61 billion in 2016–17, underlining the increasing dependence on international labour markets, especially for the skilled Indian workforce.
The US, UK, and Singapore together contributed 45% of total remittances, reflecting the rising share of high-income economies in India's total inward flows. In contrast, the Gulf Cooperation Council (GCC) countries’ contribution continues to dip, influenced by fluctuating crude oil prices. Diversification among remittance source countries shows a growing tilt towards developed markets, emphasising the upward mobility and global migration of India's skilled workforce.
Remittances formed over 10% of the $1 trillion in gross current account inflows recorded in FY25. This substantial inflow helped offset India’s merchandise trade deficit, which stood at $287 billion during the year. Remittances covered 47% of that gap, making them not just a major income stream for families but also a critical source of macroeconomic support, especially amidst volatile global financial conditions.
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According to World Bank estimates, India maintained its global lead as the largest remittance recipient, followed by Mexico at $68 billion and China at $48 billion in 2024. The IMF defines diaspora remittances as compensation of employees and personal transfers. For India, the latter constitutes the mainstay, according to the RBI’s bulletin, highlighting the role of local withdrawals and family maintenance transfers.
The surge in remittances to $135.46 billion in FY25 underscores the growing role of the Indian diaspora in strengthening the nation’s financial stability. By offsetting nearly half the trade deficit and surpassing FDI inflows, remittances represent a reliable and stabilising force in India's external account landscape. The evolving geography of these flows towards developed nations adds another layer of strength to India’s economic linkages with the world.
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Published on: Jul 1, 2025, 1:07 PM IST
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