India leads world in terms of foreign remittances

India was the world's top recipient of remittance abroad in the year 2013, with $70 billion of inflow, of which $65 billion was earned by the country's software services exports alone, the World Bank reported on Friday.

India's neighbour China was second with $60 billion.

According to the World Bank report, migrants from developing countries are expected to send $436 billion in remittances to their home countries this year, despite more deportations from some host countries.

In its latest issue of the Migration and Development Brief, the World Bank said this year's remittance flows to developing countries will be an increase of 7.8 per cent over the 2013 volume of $404 billion, rising to $516 billion in 2016.

Global remittances, including those to high-income countries, are estimated at $581 billion this year, up from $542 billion in 2013, and rising to $681 billion in 2016, the report said.

"Remittances have become a major component of the balance of payments of nations. India led the chart of remittance flows, receiving $70 billion last year, followed by China with $60 billion and the Philippines with USD 25 billion," said Kaushik Basu, senior vice president and chief economist of the World Bank.

"There is no doubt that these flows act as an antidote to poverty and promote prosperity.''

Basu added, ''Remittances and migration data are also barometers of global peace and turmoil and this is what leads World Bank's KNOMAD initiative to organise, analyse, and make available these data so important."

The depreciation of the Indian rupee during 2013 appears to have attracted inflows through a surge in the deposits of non-resident Indians rather than remittances, the World Bank said.

The bank said growth in remittances to the South Asia region has slowed, rising by a modest 2.3 per cent to $111 billion in 2013, compared with an average annual increase of more than 13 per cent during the previous three years.

The slowdown was driven by a marginal increase in India of 1.7 per cent in 2013, and a decline in Bangladesh of 2.4 per cent, the bank said.

"In Bangladesh, the fall in remittances stems from a combination of factors, including fewer migrants finding jobs in the GCC countries, more migrants returning from GCC countries due to departures and deportations, and the appreciation of the Bangladeshi taka against the US dollar," the bank said.

Still, some rebound is projected in the coming years, with remittances across the region forecast to grow to $136 billion in 2016.

In addition to the top three, other main receivers of remittances were Mexico ($22 billion), Nigeria ($21 billion), Egypt ($17 billion), Pakistan ($15 billion), Bangladesh ($14 billion), Vietnam ($11 billion) and Ukraine ($10 billion).

In terms of remittances as a share of GDP, the top recipients were Tajikistan (52 per cent), Kyrgyz Republic (31 per cent), Nepal and Moldova (both 25 per cent), Samoa and Lesotho (both 23 per cent), Armenia and Haiti (both 21 per cent), Liberia (20 per cent) and Kosovo (17 per cent).