India on track to hit $100 bn in remittances: World Bank

New Delhi, December 2

India will be the first country in the world to receive $100 billion from remittances during 2022, the World Bank has said.

First country to hit $100 bn-mark

• Remittances to South Asian countries grew by 3.5% to $163 billion in 2022
• Though remittances to the rest of the South Asian countries declined by 10%, it rose by 12% in India’s case
• Worldwide, remittances are estimated at $794 billion in 2022

Though remittances to the rest of the South Asian countries declined by 10%, it rose by 12% in India’s case. “Remittances to South Asia grew an estimated 3.5% to $163 billion in 2022, but there is large disparity across countries, from India’s projected 12% gain — which is on track to reach $100 billion in receipts for the year — to Nepal’s 4% increase, to an aggregate decline of 10% for the region’s remaining countries,” said the World Bank report on remittances.

Remittances worldwide during 2022 are estimated at $794 billion. South Asia receives the most remittances that are estimated at $163 billion in 2022, of which India’s share will be $100 billion. In terms of regions, Latin America and Caribbean comes second with $142 billion.

The easing of flows reflects the discontinuation of special incentives some governments had introduced to attract flows during the pandemic, as well as preferences for informal channels offering better exchange rates, said the report.

Remittances to India were enhanced by wage hikes and a strong labour market in the US and other member countries of OECD (Organisation for Economic Co-operation and Development). In the Gulf Cooperation Council destination countries, governments ensured low inflation through direct support measures that protected migrants’ ability to remit. Sending $200 to the region cost 4.1% on average in the second quarter of 2022, down from 4.3% a year ago.

Remittances to low and middle-income countries (LMICs) withstood global headwinds in 2022, growing an estimated 5%. This is sharply lower than the 10.2% increase in 2021, according to the latest World Bank Migration and Development Brief.

Remittances are a vital source of household income for low income countries as they help alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrolment rates for children in disadvantaged households. Studies show remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters.