Kerala has emerged as one of the biggest beneficiaries of India’s changing remittance trends, with its share of inward remittances surging from 10% in 2020-21 to 19.7% in 2023-24. The latest data from the Reserve Bank of India’s (RBI) March Bulletin, released on March 20, signals a historic shift—money sent home by Indian migrants in advanced economies has, for the first time, overtaken inflows from Gulf nations.
The overall remittance inflow into India reached $118.7 billion in 2023-24, more than double the $55.6 billion recorded in 2010-11. Net remittances continue to play a critical role in stabilising India’s external finances, covering nearly half of the country’s merchandise trade deficit.
An article in the RBI Bulletin, Changing Dynamics of India’s Remittances – Insights from the Sixth Round of India’s Remittances Survey, highlights the declining dominance of the Gulf Cooperation Council (GCC) countries in India’s remittance landscape. Instead, advanced economies like the US, UK, Singapore, Canada, and Australia now account for more than half of total inflows.
The US remains the largest contributor, with its share rising to 27.7% from 23.4% in 2020-21, while the UK’s share grew from 6.8% to 10.8%. The UAE, though still a key player, saw only a marginal rise in its share from 18% to 19.2%.
Kerala’s rising share of remittances reflects a diversification in its migrant profile. While the state has long depended on Gulf remittances, an increasing number of Keralites are moving to advanced economies for skilled jobs, higher education, and permanent residency. This trend aligns with a broader shift—India’s international migrant stock has tripled over the last three decades, from 6.6 million in 1990 to 18.5 million in 2024.
However, nearly half of India’s migrants still reside in GCC countries, particularly in sectors like construction, healthcare, and hospitality. In contrast, those in the US and UK are largely employed in white-collar professions, a factor driving higher remittances from these regions.
Maharashtra remained the top recipient of inward remittances in 2023-24, with a 20.5% share, though this was a decline from 35.2% in 2020-21. Kerala followed closely at 19.7%, reflecting the growing role of high-value transactions from its global diaspora. Tamil Nadu (10.4%), Telangana (8.1%), and Karnataka (7.7%) were also among the leading recipients.
The rising share of states like Maharashtra, Telangana, and Punjab suggests that beyond traditional migration, more Indian students are moving abroad for higher education and subsequently securing employment, contributing to higher-value remittances.
Another striking trend in 2023-24 was the rise in high-value remittance transactions. Transfers exceeding ₹5 lakh accounted for the largest share at 29%, underscoring the growing wealth of India’s global workforce. The data was collected from 30 authorised dealer banks, two major money transfer operators, and two fintech companies, covering about 99% of total remittances under the category of family maintenance and savings.
With India’s working-age population expected to keep growing until 2048, the country is likely to remain a major supplier of global labour and a key recipient of remittances.