India Received $33.67 Billion In Remittances From Five Arab Nations in 2016
According to RBI reports, India received a remittance of $62.7 billion in 2016, which is 8.9 percent less than the remittance received in 2015.
The money sent by the non-resident Indians (NRIs) to their family, friends or relatives residing in India is called remittances. India has gradually become the world’s highest receiver of remittances.
In the year 2015, India alone received more than 12 percent of the world’s remittances that was around USD 68.91 billion, accounting for over 4 percent of the country’s GDP.
According to the Ministry of Overseas Indian Affairs (MOIA), about 25 million members of the Indian diaspora send remittances into India.
Remittances To India From The Gulf Countries
Around 2.2 percent fall was recorded in receiving remittances to India from the Gulf countries before 2014 and a nine percent drop from 2015 to 2016-17, says a report from the World Bank. However, in contrast to it, the Reserve Bank of India’s report revealed that about 12 percent drop was seen in 2016-17, with the fall of Rs. 1 lakh (approx) as compared to Rs. 4.38 lakh crore in the earlier fiscal year.
As several Indians live in Gulf countries for better employment and wages, India received half of the total remittances from those five Muslim countries in 2016 amounting to USD 33.67 billion, reveals a World Bank report.
Five Muslim countries that have topped the list regarding remittance sent to India in the year 2016 are United Arab Emirates ($10 lakh), Saudi Arabia ($10.22 billion), Kuwait ($4.17billion), Qatar ($3.76 billion) and Oman ($2.95 billion). Also, remittances sent by Indian workforce from other foreign countries than the Gulf were recorded as – United States ($10.65 billion), United Kingdom ($3.58 billion), Nepal ($2.74billion), Canada ($2.61 billion) and Australia ($1.76 billion).
While looking at worldwide figures, it was estimated that USD 574 billion was sent by migrants to their families in their home countries in 2016.
The Indian States That Top The List In Receiving Remittances From Gulf Countries
A significant contribution in foreign exchanges in the form of remittances from Gulf was received by Indian states like Kerala, Telangana, Andhra Pradesh and Gujarat. Kerala accounts for 36 percent of the remittances received from the Gulf. These states are among the top international remittance-dependent economies of the world.
In an interview, Mohammed Ali Shabbir, a former minister of NRI affairs in the former state of united Andhra Pradesh said to the Caravan. the Gulf countries have been facing a crude oil crisis since 2013-14.
“The price of crude oil was between $150 and $157 per barrel in 2013-14, after which it began falling. Although the Governments of the Gulf countries managed to deal with the crisis until 2015-16, they were soon rendered helpless. The prices have fallen to $50 per barrel now. This has a direct impact on employment, and an indirect impact on the foreign exchange remitted to India and other Asian countries,” he added.
Shabbir further said, ”Indian workers are suffering due to the cancellation of mega projects in Dubai, Qatar and the Kingdom of Saudi Arabia. After India, China receives the second highest amount in the form of remittances from Gulf.”
NRIs living in the Gulf feel that there is a massive contrast in the condition of NRIs in the Gulf from the situation of NRIs in other countries as an NRI settled in the US or UK is liable to purchase land and invest in businesses. Also, their children can quickly get citizenship in these countries.
However, Gulf countries offer no such privileges, and people work there on work visas. Therefore, a majority of the NRIs send their salaries to India. Notably, Indian Government has agreed to the fact that due to lack of employment opportunities in India, Indians residing in countries such as Saudi Arabia, Kuwait, Qatar, Oman, UAE and Bahrain are forced to work for lower pay.
Know How These Remittances Are Sent To India
As per the Government of India’s Foreign Exchange Management Act (FEMA) of 1999, Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) can have access to three types of account such as Non-Resident Ordinary Rupee Account (NRO Account), Non-Resident (External) Rupee Account (NRE Account) and Foreign Currency Non Resident (Bank) Account – FCNR (B) Account.
Except, the current income, NRO Accounts are not repatriable. As per the Indian financial year (April-March), balances in an NRO account of NRIs/ PIOs are remittable up to USD 1 million along with their other eligible assets. Like NRO, NRE Accounts are also repatriable.
Interest levied on such accounts if any investments were made from this report or inward remittance from outside India. Further, inward remittances from outside India, legitimate dues in India and transfers from other NRO accounts are permissible credits to NRO account.
Money is transferred to India either electronically (for example, by SWIFT) or by demand draft. However, in recent years an eminent growth has been noticed as a lot of Indian Immigrants living abroad have started sending money to India using online money transfer services like a lot of Online and mobile companies have made it easier by facilitating the transition to online remittances. Following them, Indian banks have started offering such services to people resulting in a considerable business profit for banks.