India has set a new record in remittance inflows, receiving a staggering $135.46 billion from its global diaspora in the fiscal year 2024–25, according to data cited by the Economic Times. The figure marks a 14% increase from the previous year, underscoring the critical role overseas Indians continue to play in bolstering the nation’s economy.
Remittances, listed as ‘private transfers’ in India’s balance of payments, made up over 10% of the country’s gross current account inflows, which totaled $1 trillion in 2024–25. Analysts and policymakers alike are hailing these transfers as a stable and vital source of external financing — often surpassing foreign direct investment (FDI) into the country.
“India’s remittance receipts have generally remained higher than India’s gross inward foreign direct investment flows, thus establishing their importance as a stable source of external financing,” the Reserve Bank of India (RBI) noted in a staff report.
The United States was the largest source of remittances to India, accounting for 27.7% of the total, followed by the United Arab Emirates (19.2%), the United Kingdom (10.8%), and Saudi Arabia (6.7%), according to data reported by the Indian Express.
In calendar year 2024, India also retained its position as the top recipient of global remittances, according to the World Bank, which pegged the figure at $129 billion — ahead of Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion), and Pakistan ($33 billion).
Experts attribute the sustained growth in remittances to a rise in the number of skilled Indian workers migrating to advanced economies. “The strong growth in remittances has persisted despite a weakness in crude oil prices,” said Gaura Sengupta, chief economist at IDFC First Bank. “This is a result of a rising share of the skilled labor force migrating to developed markets such as the US, UK, and Singapore.”
However, concerns loom over future inflows amid shifting economic conditions and new policy developments abroad. On Tuesday, the U.S. Senate passed President Donald Trump’s “One Big Beautiful Bill Act,” which introduces a 1% tax on overseas money transfers made by non-citizens. The levy applies to cash transfers, money orders, and cashier’s cheques, potentially affecting millions of Indian-origin workers in the U.S.
Economists warn that economic slowdowns in major host countries or restrictive policies could dampen remittance growth to India and other nations in the Global South, many of which rely heavily on such transfers to support domestic consumption and balance external accounts.
