India highest recipient of remittances

India highest recipient of remittances

Context:

According to World Bank’s Migration and Development Brief, India has retained the top position as a recipient of remittances.

Highlights of the Report:

Remittances inflows:

• Global remittances which includes flows to high income countries grew 7 per cent to USD 613 billion in 2017 from USD 573 billion in 2016
• India ranked first as the recipient of remittances ($69 billion in 2017)
• India’s remittance inflows increased 9.9% in 2017 after a steep decline in 2016
• India is followed by China, Philippines, Mexico, Nigeria and Egypt
• Remittances to South Asia grew a moderate 5.8 percent to $117 billion in 2017.
• Flows to Bangladesh and Pakistan remained largely flat in 2017
• Small decline in remittances flowing to Sri Lanka

What factors contributed to increase in India’s remittance inflows?

• Economic growth in Europe, Russia and US
• Increase in oil prices

Average cost of Sending:

• The global average cost of sending $200 was 7.1 per cent in the first quarter of 2018.
• Highest average cost: 9.4 percent in Sub-Saharan Africa
• Lowest average cost: 5.2 percent in South Asia.
• The average cost is higher than the Sustainable Development Goal target of 3 percent in all regions

Barriers to Reducing cost:

• Derisking by Banks
• Exclusive partnership between national post officers systems and money transfer operators
• These hinder the introduction of technologies, such as mobile apps and the use of crypto currency and Blockchain in remittance services

Predictions for 2018:

Global remittances are expected to grow 4.6% to $642 billion in 2018.