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Indian remittances fall as Gulf reduces demand for foreign workers
April 2, 2016, 5:52 pm
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Remittances to India - a large chunk of which comes from the millions of Indians working in the Gulf region - fell to $15.8 billion last quarter, the lowest since April-June 2011, it has been reported.

Bloomberg reported that the figure represented a 9.4 percent drop from a year earlier, as the global slowdown and slumping oil prices reduced the demand for foreign workers.

India relies on remittances and earnings from services exports to help bridge a trade shortfall and support its currency and Indians working overseas remitted $72.2 billion in 2015, Bloomberg said, citing World Bank estimates.

It added that workers in the Gulf region accounted for more than half of funds sent home in 2014, while labourers in the UAE sent the single biggest chunk of $13 billion.

Indians working abroad send home the most money in the world, helping to pay for imports of fuel and electronics.

Bloomberg quoted Suvodeep Rakshit, an economist at Kotak Securities Ltd in Mumbai, as saying that the drop in cash flows is a "red flag", adding that a further drop would be “a headache" for Indian leaders to resolve.

India has about 14 million migrants overseas and remittances account for less than 4 percent of the Indian economy, compared with 10 percent for the Philippines and almost 30 percent for Nepal.

 

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