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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.
