India saw the highest amount of remittance inflows in the world in 2023 at $125 billion

According to the World Bank, India had the largest remittance inflows globally in 2023, totaling $125 billion. This was mostly due to the country's agreement with the United Arab Emirates to encourage the usage of dirhams and rupees for bilateral commerce. The World Bank said in a research that from a historical high of 24.4% in 2022, growth in remittances from India is predicted to cut in half to 12.4% in 2023.

India was followed by Egypt ($24 billion), the Philippines ($40 billion), China ($50 billion), and Mexico ($67 billion). Remittance inflows account for significant portions of GDP in the following economies: Tajikistan (48%), Tonga (41%) Samoa (32%), Lebanon (28%), and Nicaragua (27%). This underscores the significance of remittances in covering current account and fiscal deficits.

Remittances from highly skilled Indians in the US, UK, and Singapore have increased, making up 36% of all remittance flows to New Delhi. The World Bank attributed this increase to declining inflation and robust labour markets in high-income source countries. It went on to say that the agreement India and the UAE reached in February 2023 to create a framework encouraging the use of local currencies for cross-border transactions and collaboration in connecting payment and messaging systems significantly impacted remittance flows to India.

It stated that more remittances through official channels will be facilitated by the usage of dirhams and rupees in cross-border transactions. In 2023, remittances to low- and middle-income nations expanded by an anticipated 3.8%, slowing down from the sharp increases in the preceding two years. The probability of a drop in migrant workers' real income in 2024 is concerning given the likelihood of global inflation and bleak economic prospects, the paper continued.