Remittances from Overseas Indians Hit Record $135 Billion in FY25

Mumbai — Remittances sent by Indians working abroad reached an all-time high of $135.46 billion in the financial year 2024-25, marking a 14% increase compared to the previous year, according to data released by the Reserve Bank of India (RBI).

The RBI stated that these inflows, categorized as "private transfers," contributed over 10% to India's gross current account flows, which stood at $1 trillion for FY25.

Data reveals that personal transfer receipts, primarily representing remittances from Indians employed overseas, rose to $33.9 billion in the January-March quarter of FY25, up from $31.3 billion during the same period last year.

In 2024, India also set a new annual record for remittances, receiving $129.4 billion, with the October-December quarter alone contributing a historic $36 billion.

India maintained its position as the world’s top recipient of remittances in 2024, far ahead of Mexico at $68 billion. China followed with $48 billion, while the Philippines and Pakistan recorded $40 billion and $33 billion, respectively, according to World Bank data.

The global growth rate of remittances for 2024 is estimated at 5.8%, a sharp rise from the 1.2% growth seen in 2023.

The Indian diaspora has expanded significantly over the years. The number of Indians working overseas has grown from 6.6 million in 1990 to 18.5 million in 2024, increasing India’s share in global migration from 4.3% to over 6%. Approximately half of all Indian migrants reside in Gulf countries.

The rebound in job markets across high-income nations, particularly those in the Organisation for Economic Co-operation and Development (OECD), has been a key factor driving remittance growth. In the United States, employment among foreign-born workers has risen steadily and is now 11% higher than pre-pandemic levels recorded in February 2020.

In a significant development for Indian professionals working in the US and Non-Resident Indians (NRIs) sending money back home, the latest draft of the One Big Beautiful Bill Act, proposed by former President Donald Trump, has reduced the tax rate on remittances from 5% to 1%.

Apart from remittances, software services and business services were also major contributors to India’s current account inflows in FY25, each generating over $100 billion. Together, these three sectors accounted for more than 40% of the country’s total current account receipts, playing a crucial role in containing India’s current account deficit.

With inputs from IANS