India’s demography, with the country being the youngest nation among the major economies, is reshaping capital flows into the country, with its citizens and their talent at the forefront. It’s one of the best outcomes can be seen in the country’s inward remittances, which are undergoing a major shift in their sources, a development that should be seen as a testament to the growing skillset of its people.
While in the past, remittances to India were dominated by the Gulf nations, there has been a paradigm shift, which reflects India’s power as the world’s fastest-growing economy, soon to become the world’s third-largest economy, powered by its industries, its people, and its large market. Now, the world’s advanced economies have become the primary source of inward remittances to India.
During 2023–24, advanced economies, such as the US, UK, Singapore, Canada, and Australia, accounted for more than half of all remittances to India, according to a dataset from the Reserve Bank of India (RBI).
Earlier, remittances were largely dominated by blue-collar jobs held by Indian migrants in the Gulf nations. Now, the share of remittances from advanced economies, known for attracting global talent for white-collar jobs, has replaced that.
India, the fastest-growing major economy, attracts multinational companies with its vast domestic market, which, in turn, becomes a job platform for skilled hands here. Combined with this, India is also emerging as a country with a talented workforce base for other countries’ white-collar jobs.
The United States, home to the Indian diaspora engaged mostly in white-collar jobs, was the largest source of remittances to India, with 27.7% of inward remittances coming in 2023–24, up from 22.9% in 2016–17, according to RBI data. RBI notes that the ranks of foreign-born workers swelled in the United States, by 6.3% in 2022, compared with 0.7% in 2019. Overall, around 78% of Indian migrants in the US are engaged in high-remuneration fields, such as management, science, and the arts, with many NRIs now working as CEOs of the world’s biggest firms. The success of Indian immigrants there means billions of dollars being sent back home to their families and extended families.
The United Kingdom saw a more than double increase in the same period, from 3% to 10.8%. India and the UK signed a strategic partnership in 2021, with the ‘Migration and Mobility Partnership’ acting as a catalyst. Indian emigration to the UK more than tripled to 250,000 by the end of 2023, with half of them being skilled professionals taking up new opportunities. Singapore accounted for 6.6% of the inward remittances share, while Canada contributed 3.8%. Australia was not mentioned as a source of inward remittances in 2016–17, but, in 2023–24, it accounted for 2.3% of inward remittances.
India’s talented manpower working in different countries, including the advanced economies, should be seen as a strategic placement of its demographic dividend on the world stage, creating a pipeline for future prosperity for the nation. Of the 13.4 lakh Indian students (as of January 2024) studying abroad, Canada was the top choice (32%), followed by the US (25.3%), the UK (13.9%), and Australia (9.2%).
38% of remittances in 2023–24 came from countries that are part of the Gulf Cooperation Council. The United Arab Emirates, once the top source of inward remittances, with a 26.9% share in 2016–17, remained the second-largest, with its share falling to 19.2% in 2023–24.