April 22, 2025
NEW DELHI – While working in India, software engineer Abhinav Gupta was on the lookout for better opportunities when one of his clients told him about an exciting role in Singapore to build programmes for contact centres.
The offer came with an attractive salary and brought with it the opportunity to move to a city known for its high liveability index. “I did a little bit of research and I was like, okay, it (Singapore) is basically the New York City of South-east Asia, so why not?” said Mr Gupta.
Mr Abhinav Gupta (name changed on request) relocated to Singapore in March 2023 and today earns an almost six-figure annual salary, allowing him to invest $1,000 to $2,000 each month in India’s stock market and mutual funds.
“I’m doing this because I do believe in the Indian market. I think it’s a good return,” said Mr Gupta, who did not want to be identified publicly with his investments.
Skilled workers in advanced economies such as Mr Gupta are a growing breed among the overseas Indian population, estimated at around 18.5 million – a group that has traditionally been dominated by migrants in Gulf countries, many of whom are low- or semi-skilled workers.
This shift has led to an increase in the share of remittances from advanced economies such as the US and Britain, which has boosted India’s total remittance inflow, despite a decline in the amount of money sent home by Indians based in the Gulf Cooperation Council (GCC) countries in recent years.
India’s remittances could, in fact, reach as high as US$300 billion (S$391 billion) in the next 10 years if the country manages to send “the right people with the right skills to the right place”, Dr S. Irudaya Rajan, chairman of the International Institute for Migration and Development, told The Straits Times.
This figure would be more than double the record US$129.4 billion in remittances India received from abroad in 2024, the third consecutive year that remittances exceeded the US$100 billion mark.
Money sent home by Indians overseas has long been a reliable and critical source of external financing for India’s development.
According to the World Bank, India has been the top recipient of remittances since 2008. Its annual remittances have also consistently been higher than the country’s gross foreign direct investment since the 2000 to 2001 period.
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), which together comprise the GCC, have traditionally been the biggest remittance contributors to India because of the large numbers of Indian workers employed there.
But this is no longer the case.
A recent paper published in March by researchers from the Reserve Bank of India (RBI) noted a shift in the sources of India’s remittances, away from GCC countries to advanced economies, starting from the 2016 to 2017 period, when India’s central bank began collecting country-specific data of remittance inflow into India.
The GCC countries accounted for more than 46.7 per cent of India’s remittances worth US$63 billion in the financial year that ended March 2017, but their share fell to 37.9 per cent of the total at US$118.7 billion in financial year 2024.
However, remittances from the US, Britain, Singapore, Canada and Australia jumped from a share of around 34.4 per cent to 51.2 per cent in the same period.
The US was the largest source of remittances, making up 27.7 per cent of the total share in FY24, and dethroning the UAE, which held the top spot in FY17 contributing 26.9 per cent of the total amount.
The share of India’s remittances from Singapore also increased from 5.5 per cent in FY17 to 6.6 per cent in FY24.
The paper, authored by researchers from RBI’s Department of Economic and Policy Research, accentuates the growing remittance contribution of skilled Indian workers in advanced economies. It reflects the ongoing shift in the profile of Indian migrants overseas – from workers in lower-skilled roles to professionals in highly skilled jobs.
For instance, it is estimated that 78 per cent of more than two million Indian migrants in the US are employed in highly remunerative sectors such as management, technology, business or science.
The number of Indians migrating to Britain annually has also grown to about 250,000 as at end-2023 – more than three times the 76,000 as at end-2020 – about half of whom had moved for work-related purposes.
Given the importance of remittances in ensuring India’s growth, the government has sought to boost them by encouraging skill development in the country as a pathway for overseas migration in recent years, a strategy that also allows skilled Indians to find well-paying jobs abroad that are scarce domestically.
The paper noted the need for Indian policymakers to study the shift in demand for more highly skilled labour abroad, to ensure Indian workers can be skilled or reskilled to meet such evolving demands, and so remittances can be further leveraged for the country’s development.
The fall in remittances from GCC countries has been attributed to the Covid-19 pandemic, which resulted in widespread job losses and salary cuts, prompting a mass exodus of contractual Indian migrant workers from those countries.
There has also been a drive in GCC countries to prioritise employment opportunities for locals, since before the pandemic, and to reduce dependence on expatriate workers.
The rise in remittances from advanced economies has come from more skilled Indian workers, as well as students, moving there in recent years. Indians working there have a higher per capita income than Indians in GCC countries, and many students work part-time to repay their educational loans back home.
Moreover, currencies such as the US dollar, the euro and Britain’s pound sterling have also considerably appreciated in value against the Indian rupee, possibly encouraging remitters to send more money back to India. In April 2020, the US dollar traded at around 76 rupees. The exchange rate has now gone up to more than 85 rupees, appreciating by nearly 12 per cent on a nominal basis.
But experts such as Dr Rajan cautioned that the increase in remittances from advanced economies could be a short-term trend, as the rise of right-wing populist and anti-migrant sentiment in the US and other developed countries risks restricting immigration.
“I don’t think we should celebrate… the fact that we are getting more money from advanced economies as a great victory… In another five to six years, the Gulf countries may be back on top,” he said.
In such an evolving scenario, India’s approach to overseas migration, said Dr Rajan, should be nimble and proactive. The government and other agencies should be able to identify countries with specific skill gaps and train Indian workers to meet those needs.
It is also important to further reduce the cost of sending money back to India so that the country can draw more remittances, noted the authors of the RBI paper.
According to the World Bank, the average cost of sending US$200 to India in the third quarter of 2024 stood at 5.3 per cent, lower than the global average of 6.62 per cent but still higher than the 3 per cent that the United Nations’ Sustainable Development Goals recommended be reached by 2030.
However, experts note that growing international links between Unified Payments Interface – India’s real-time digital payments system – and its international counterparts, such as Singapore’s PayNow, can bring down the cost of sending remittances to the country.
- Debarshi Dasgupta is The Straits Times’ India correspondent covering the country and other parts of South Asia.