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10 August 2011

Indians abroad are worth $55 billion

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Shafeeq Rahman on the finer details of remittances into India and out of the country


International remittance plays an important role in less developed countries like India in terms of net inflow of foreign exchange amount, which increases the volume of national income and enhances the livelihood of families associated with migrant workers. Further, overseas communities can constitute a significant resource for the development of the countries of origin. India, China, Mexico, Philippines, France, Germany and Bangladesh are among the top remittance-receiving countries while the US, Saudi Arabia, Switzerland, Russia, Germany, Italy and Spain are among the top remittance-sending countries. India is ranked at top position in the world among the recipient countries of international remittance in 2010 and its total international remittance of $55 million constitutes around 5% of the national income. International remittance has rapidly grown to India over ten years despite the financial crisis in overseas countries between 2008 and 2009. The percentage change between 2010 and 2003 is more than 162 with the compound growth rate of 13% per annum. During the year 2003, the international remittance received by India was merely $20,999 million while the estimated worth for 2010 is $55,000 million.


The main sources of international remittance to India in 2010 are the UAE, the US, the UK, Canada, Saudi Arabia, Kuwait, Australia, Singapore, Qatar and Oman. In terms of number of migrants, major Indian population resides in West Asian countries but in terms of money value, high remittance reaches India from Canada, the UK and the US. Based on the analysis of data released by the World Bank, it can be concluded that Indian emigrants, in terms of productivity according to the remittance they earned, is low in Gulf countries as compared to western countries. Remittance received per emigrant in Saudi Arabia and Qatar is 4th-time-low when compared to the amount an emiThe main sources of international remittance to India in 2010 are the UAE, the US, the UK, Canada, Saudi Arabia, Kuwait, Australia, Singapore, Qatar and Oman. In terms of number of migrants, major Indian population resides in West Asian countries but in terms of money value, high remittance reaches India from Canada, the UK and the US. Based on the analysis of data released by the World Bank, it can be concluded that Indian emigrants, in terms of productivity according to the remittance they earned, is low in Gulf countries as compared to western countries. Remittance received per emigrant in Saudi Arabia and Qatar is 4th-time-low when compared to the amount an emigrant sent from the US or Australia. The detailed analysis of remittance for the top countries is shown in the table.

Some value quality differences are found in the interstate receipt of international remittances based on the nature of their overseas employer country. As per the nsso report released in 2010 for the data year 2007-08, Kerala is among the top states with the highest number of migrants, 40% of the total Indian migrants. These migrants mostly reside in West Asian and Gulf countries but their average remittance per households is less than a third of Punjab, which receives the remittance mainly from Canada, the UK and the US. Other prominent states receiving international remittance are Tamil Nadu, Andhra Pradesh and Uttar Pradesh.
India has the second-largest community abroad after China and the estimated community size is more than 25 million spread across all regions of the world. India’s international migration of workers was earlier based on unskilled workers moving to West Asian countries. But, in the last three decades of the twentieth century, the character of the migrant worker has transformed from unskilled workers to highly skilled professionals moving to the western world, and semi-skilled contract workers moving to the Gulf, West and Southeast Asian countries. Even now a large number of workers in the Gulf and the West Asian region have inadequate labour security arrangements and work as highly underpaid professionals.

Countries with highest remittance to India (2010)
Country
Amount in million (US$)
Number of emigrants
Remittance per emigrant (US$)
UAE
15,879
21,85,919
7,264
US
15,279
16,54,272
9,236
UK
4,629
6,57,792
7,037
Saudi Arabia
3,339
14,52,927
2,298
Kuwait
2,025
3,93,210
5,150
Australia
1,906
2,09,908
9,078
Singapore
1,167
1,57,114
7,427
Qatar
1,033
2,50,649
4,120
Oman
1,021
4,47,824
2,279
Total
55,000
113,60,823
4,841


The Indian government is always concerned about better facilities for transfer of overseas remittance to India. It has taken initiatives, which, inter alia, include market-based exchange rate, current account convertibility, regulatory measures to facilitate institutional development for wider access to remittance services, policy initiatives for speedier and cost-effective money transfer arrangements.


In recent years, outward remittance has also increased from India to the immigrants from other developing countries. The percentage change between 2009 and 2003 is estimated at more than 216 with the compound growth rate of 18% per annum. The total international remittance outflow from India was $1,265 million in the year 2003, which increased to $4,000 million in 2009. Higher economic growth, better infrastructure, a professional work environment and improving living standard are the main factors attract ing the foreign nationals to work in Indian and mncs companies here. The main source countries of outward remittance are Bangladesh, Pakistan, Nepal, Sri Lanka, Myanmar, China, Malaysia, the United Arab Emirates, Afghanistan and Bhutan.


[Shafeeq Rahman is a professional researcher on India-centric socioeconomic and political databases.He can be reached at rahman.shafeeq@gmail.com]


(Courtesy: Tehelka, India)

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