Tracing the shifting patterns of remittance flows

New Delhi: When the Reserve Bank of India (RBI) releases the countrys balance of payments data for 2022-23, by end-June, it is highly likely that remittances by Indians working abroad to families in India will cross $100 billionthe highest ever..

As the World Banks most recent report on remittances, issued last year, points out, remittances have benefitted from a gradual structural shift in Indian migrants key destinations from largely low-skilled, informal employment in the Gulf Cooperation Council (GCC) countries to a dominant share of high-skilled jobs in high-income countries such as the United States, the United Kingdom, and East Asia.".

Taken together, worker remittances and the LRS provide a window into how individuals, as opposed to corporations or government, directly figure in Indias overseas transactionsone set brings money in, the other set takes funds out..

If the government, the World Bank and others have made much of the fact that India is the worlds highest recipient of remittances, transactions going the other way have received relatively less attention (to be clear, there is nothing wrong with Indians remitting funds abroad for travel or education)..

Even as the absolute volume of migrant remittances hits an all-time high, it has actually become less significant a factor in Indias overall current account, with revenues from software and business services now the dominant part of invisibles flow into India..

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