The contributions from advanced economies towards India’s inward remittances have increased
| Photo Credit: PTI
The latest data indicate a decline in the Gulf countries’ share of India’s inward remittances, while contributions from advanced economies have increased. The data also reveal that States with a declining share of migrants to the Gulf countries are seeing a growing share of India’s inward remittances, while those with higher migrant outflows to the Gulf contribute only a minimal—and further decreasing—share.
These trends have a significant impact on States such as Bihar, Uttar Pradesh, Rajasthan, and West Bengal, which have continued to send large numbers of workers to the Gulf countries over the past decade. In contrast, States such as Tamil Nadu, Kerala, Andhra Pradesh, Telangana, and Punjab — historically major contributors of migrants to Gulf migration — have seen a considerable decline in the number of emigrants.
Table 1 shows the country-wise share of India’s inward remittances for the years 2016-17 and 2023-24.
The UAE’s share dropped from 26.9% to 19.2%, Saudi Arabia’s from 11.6% to 6.7%, and Kuwait’s from 6.5% to 3.9%. Conversely, remittances from advanced economies have increased. The U.S.’s share rose from 22.9% to 27.7%, the U.K.’s from 3.4% to 10.8%, Singapore’s from 5.5% to 6.6%, and Canada’s from 3% to 3.8%.
Table 2 presents the State-wise share of India’s inward remittances for the years 2016-17 and 2023-24.
The data reveal an increasing share for States such as Maharashtra, which rose from 16.7% to 20.5%, Kerala from 19% to 19.7%, and Tamil Nadu from 8% to 10.4%.
In contrast, States such as Uttar Pradesh, which already had a low share of 3.1% in 2016-17, saw a slight decline to 3% in 2023-24. Similarly, West Bengal, Rajasthan, and Bihar maintained consistently low shares, ranging between 1% and 3% during this period.
Table 3presents the absolute number of Emigration Clearances (ECs) issued to workers from various States across three periods: 2014-16, 2017-20, and 2021-24. ECs are primarily required by blue-collar workers emigrating from India to the Gulf for employment.
Table 4 provides a State-wise breakdown of ECs issued as a percentage of India’s total in the periods.
Tables 3 and 4 reveal two distinct patterns in migration trends. The number of blue-collar workers emigrating to the Gulf from southern States has declined. Kerala’s numbers dropped from over 82,000 in 2014-16 to 60,000 in 2021-24, Tamil Nadu’s from 1.3 lakh to 78,000, Telangana’s from 69,000 to 35,000 and Andhra Pradesh’s from 87,000 to 55,000. Punjab’s reduced from 94,000 to 39,000.
But, migration from northern and eastern States remained high. The number of workers from Uttar Pradesh stayed above 4 lakh in both periods, while Bihar’s remained over 2 lakh. Although migration from West Bengal and Rajasthan to the Gulf also declined, the scale of reduction was smaller compared to the southern States.
If the State-wise share of ECs issued by India is compared to the State-wise share of India’s total electorate, the skew is even more revealing. The electorate is used as a proxy for the population. Uttar Pradesh formed 15.8% of India’s electorate in 2024 but in the 2021-24 period, the State formed 34% of ECs issued. Similarly, Bihar formed 7.9% of the electorate but formed 17.4% of ECs issued.
Table 5 | % of ECs issued in 2021-24 vs % of India’s electorate in 2024
When analysed together, the tables raise some critical questions. Are migrants from southern States opting for destinations outside the Gulf, given the relatively lower financial returns as suggested by the declining remittance share? Also, do workers from Bihar and U.P. continue to migrate to the Gulf in bulk despite lower wages due to limited alternative opportunities?
Source: The data was taken from the article titled “Changing Dynamics of India’s Remittances – Insights from the Sixth Round of India’s Remittances Survey”, published in the Reserve Bank of India’s March 2025 bulletin. Electorate data was sourced from Election Commission of India’s 2024 statistical reports page. Emigration clearances data for the years 2014 to 2020 were taken from the E-migrate portal and for the latest years from a Rajya Sabha Q&A.
Published – March 24, 2025 07:00 am IST