This remarkable achievement is nearly double the combined total of $54 billion from foreign direct investments (FDI) and portfolio investments during the same period, underscoring the pivotal role played by the Indian diaspora in supporting their homeland's economic growth.
In a remarkable display of the resilience and economic might of the Indian diaspora, the financial year 2023-24 saw unprecedented remittances flowing into the country. According to a report by The Economic Times, Indians residing abroad sent a staggering $107 billion in remittances to their families in India, surpassing the $100 billion threshold for the second consecutive year.
This remarkable achievement is nearly double the combined total of $54 billion from foreign direct investments (FDI) and portfolio investments during the same period, underscoring the pivotal role played by the Indian diaspora in supporting their homeland's economic growth.
The balance of payments data reveals that the gross figure of remittances from the Indian diaspora, categorized as private transfers, reached a remarkable $119 billion in FY24. After accounting for the repatriation of income by foreign residents and other related expenses, the net private transfers amounted to an impressive $107 billion.
The United States emerged as the primary contributor, constituting 23 percent of the total remittance inflow, highlighting the strong economic ties between India and its global citizens. While remittances from the Gulf region experienced a decline during this period, the majority of these funds were utilized for familial support, with a portion also allocated to investments such as deposits, according to the Reserve Bank of India's findings.
"The report quoted Dilip Ratha, lead economist and principal author of the World Bank report, as saying that remittance flows to developing nations have outpaced foreign direct investment and official development assistance in recent years. This trend is expected to continue widening," he said.
The World Bank's "Migration and Development Brief" further solidifies India's position as the global leader in receiving remittances from its diaspora, a trend that has persisted for over two decades, driven largely by the migration of IT professionals to North America and Europe since the 1990s.
The Liberalised Remittance Scheme (LRS), introduced in 2004, has played a crucial role in facilitating these remittances. Under the LRS, resident individuals, including minors, have the liberty to remit up to $250,000 annually for any allowable current or capital account transaction, or a combination thereof.
This remarkable achievement not only highlights the strong economic ties between India and its global citizens but also underscores the country's ability to harness the potential of its diaspora. As India continues to forge ahead on the path of economic growth and development, the unwavering support of its overseas citizens will undoubtedly remain a driving force behind its success.