High-value, white-collar inflows have led a shift in India’s inward remittances

Remittances to India have more than doubled from $55.6 billion in 2010-11 to $118.7 billion in 2023-24 (the graph alongside has calendar years). In fact, India leads the global league tables in remittances, being the top recipient. Remittances crossed the $100-billion mark in 2021. And, looking at the run-rate so far, remittances are likely to touch a new record for 2024-25.

RBI’s sixth round of surveys on inward remittances for 2023-24, covered in its bulletin’s March 2025 edition, states that despite the contraction during the pandemic, the resurgence in subsequent years points to an improvement in employment opportunities in advanced economies. 

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To wit, remittances from the US to India had the highest share among inward remittances from all countries, at 27.7%. The UAE came in second with a 19.2% share. This same pecking order was in evidence during 2022-23 and is a complete reversal from the traditional ranking. For example, in 2016-17, the UAE had a 26.9% share while the US had 22.9%, and the ongoing reshuffle indicates shifting dynamics.

It seems that remittances from white-collar Indian employees (US) have now overtaken, or are in the process of overtaking, remittances from blue-collar workers (UAE). While there are white-collar workers even in the UAE, it is safe to assume that the bulk of remittances from the US originate from mostly white-collar workers, since the country is not among the top destinations for most blue-collar workers. 

Here is another interesting data-point supporting the shifting trend in the nature of remittances: inflows from the US, UK, Singapore, Canada and Australia contributed more than 50% of the remittances.

Indeed, a further bump-up in remittances from the US during 2024-25 can be expected due to certain categories of non-resident Indians reducing their dollar assets in favour of rupee assets, given the rising political and economic uncertainty there. The rupee’s sharp depreciation over the past few months would have added to the attraction.

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However, the uncertainty also holds out a red flag: with the Donald Trump administration in the US now flexing its nationalist muscles by targeting immigrants, there is a likelihood of some jobs evaporating for Indian professionals. Many leading US-based companies, acting on smoke signals emanating from the White House, have slowed down their recruitment of non-US citizens. Many Indian companies are also seeing their outsourcing contracts from US-based firms dry up. 

While it is still too early to determine or quantify the impact of these developments on remittances from the US, this merits a continuing vigil.

RBI’s survey reveals another emerging trend: Maharashtra received the highest remittances, followed by Kerala, Tamil Nadu, Telangana and Karnataka. These top five states accounted for over 66% of inward remittances. Juxtaposed against other available data, the shift is unmistakably in favour of white-collar workers. Here is another confirmatory data point: individual remittances worth over ₹500,000 during 2023-24 had the highest share among remittances by value. But, in terms of volume, the highest number of remittances had ticket sizes below ₹16,500.

Replying to an unstarred question in the Rajya Sabha on 28 November 2024, the minister of state for external affairs Kirti Vardhan Singh provided state-wise data of workers granted emigration clearance (mandatory for those who have not cleared their Class 10 exams) between 1 January 2021 and 19 November 2024. The top five recipient states mentioned earlier accounted for 211,572 workers obtaining emigration clearance, against 643,186 from just two states, Uttar Pradesh and Bihar.

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These data points provide grist for many discussion mills. Assuming there has been a spike in white-collar remittances, as data seems to indicate, it would necessarily imply that a larger number of educated and skilled Indian professionals are seeking opportunities overseas, thereby raising questions about the state of employment in India and the loss of talent to overseas opportunities. 

This is reminiscent of the old ‘brain drain’ debate about India losing its qualified professionals to advanced nations, instead of working at home and helping India’s economy grow. The counter-argument was that this phenomenon helped generate remittances, thereby filling a vital gap in India’s external economy. The situation was further infused with an element of helplessness: the supply of suitable jobs hopelessly lagged demand. In some ways, the situation does not seem to have changed much.

Something else also seems unaffected by time: remittance costs. While the RBI survey finds that the average cost of sending $200 to India in 2023 had reduced to 4.9%, which is a shade below the G20’s 5% target and among the world’s lowest, the cost remains significantly above the SDG target of 3%. This needs sustained cross-border cooperation, alongside continuing efforts to squeeze unofficial routes of money transfer.

The author is a senior journalist and author of ‘Slip, Stitch and Stumble: The Untold Story of India’s Financial Sector Reforms’ @rajrishisinghal