India Tops Global Remittance Charts with Record $135.46 Billion in FY25

India retained its position as the top global remittance recipient in FY25, with its diaspora sending a record $135.46 billion, a 14% rise from the previous year. Remittances now account for over 10% of India’s $1 trillion gross current account inflows, surpassing foreign direct investment as a key funding source. Skilled migration to developed nations like the US and UK has driven growth, while Gulf contributions have declined. These inflows play a vital role in reducing India’s trade deficit and supporting economic stability.

India has once again solidified its position as the world’s largest recipient of remittances, with its diaspora sending home a record-breaking $135.46 billion in the last fiscal year, according to the Reserve Bank of India (RBI). This marks a 14% increase in gross inward remittances compared to the previous year, as reflected in the “private transfers” category of India’s balance of payments data.

Over the past decade, India has consistently led the global rankings for remittance inflows. The growth has been remarkable, with the total amount sent by overseas Indians more than doubling from $61 billion in 2016-17 to the current figure.

A Crucial Component of India’s Current Account

Remittances now account for over 10% of India’s gross current account inflows, which totaled $1 trillion in the fiscal year ending March 31. Alongside income from software and business services — both exceeding $100 billion last year — remittances form a vital pillar of India’s external finances. Together, these three sources contributed to more than 40% of the country’s gross current account inflows.

“India’s remittance receipts have consistently surpassed gross inward foreign direct investment (FDI) flows, underscoring their importance as a reliable and stable source of external funding,” noted an RBI staff report. This steady inflow of funds also plays a crucial role in addressing India’s trade deficit. In FY25, remittances accounted for nearly half (47%) of the $287 billion merchandise trade deficit.

Shifting Dynamics in Remittance Sources

The surge in remittances has been fueled by a rising share of skilled Indian workers relocating to developed economies such as the United States, the United Kingdom, and Singapore. According to Gaura Sengupta, chief economist at IDFC First Bank, these three countries now contribute 45% of India’s total remittances.

Meanwhile, the share of remittances coming from Gulf Cooperation Council (GCC) countries has been gradually declining, a trend influenced by fluctuations in crude oil prices. Historically, oil prices have directly impacted remittance flows from GCC nations, where a significant number of Indian expatriates work.

India also benefits from being one of the least expensive countries for sending remittances, particularly small amounts such as $200, as highlighted in an RBI research paper.

A Global Context

India’s dominance in the remittance landscape is unrivaled. According to World Bank data, Mexico ranked a distant second in 2024 with $68 billion in remittances, followed by China at $48 billion. This underscores the scale and significance of India’s diaspora contributions.

Globally, remittances represent cross-border household income, arising from the temporary or permanent migration of individuals. The International Monetary Fund (IMF) classifies remittances under two categories in balance of payments statistics:

compensation of employees (primary income) and personal transfers (secondary income).

For India, personal transfers — which primarily include funds sent home by Indian workers abroad for family maintenance and withdrawals from non-resident deposit accounts — form the bulk of cross-border remittances.

A Stable Lifeline for India’s Economy

Remittance inflows have proven to be a resilient and steady source of external financing for India. Their reliability, particularly during periods of global economic uncertainty, highlights their critical role in supporting India’s current account and trade deficit.

As India continues to benefit from the contributions of its diaspora, the country’s global standing in remittance receipts remains a testament to the enduring connection between overseas Indians and their homeland.