Remittances to India from Qatar, four other GCC countries drop between 2016 and 2021: World Bank

The share of remittances to India from five GCC countries including Qatar has dropped to 28% between 2016 and 2021 (from 54% earlier) according to a World Bank report.
India’s remittance receipts are on track to reach $100bn in 2022, a report by Global Knowledge Partnership on Migration and Development (Knomad), a World Bank initiative, has shown.
Between 2016-17 and 2020-21, the share of remittances from the US, UK, and Singapore increased from 26% to over 36%, while the share from the five GCC countries (Saudi Arabia, UAE, Kuwait, Oman, and Qatar) dropped from 54% to 28%, it said.
The year 2022 will have been a memorable one for India as its remittance flows soar to $100bn from $89.4bn in 2021, growing at 12% compared to 7.5% in 2021.
Several longer- and short-term trends that were obscured by the pandemic were catalytic in spurring remittance flows to India.
First, remittances have benefited from a gradual structural shift in Indian migrants’ key destinations from largely low-skilled, informally employment in the Gulf Co-operation Council (GCC) countries to a dominant share of high-skilled jobs in high-income countries such as the US, the UK, and East Asia (Singapore, Japan, Australia, New Zealand).
With a share of 23% of total remittances, the US surpassed the UAE as the top source country in 2020-21. About 20% of India’s emigrants are in the US and the UK.
According to the US Census, of the approximately 5mn Indians in the US in 2019, about 57% had lived in the nation for more than 10 years.
During this time, many earned graduate degrees that groomed them to move rapidly into the highest-income-earner category.
The Indian diaspora in the US is highly skilled. In 2019, 43% of Indian-born residents of the US had a graduate degree, compared to only 13% of US-born residents.
Only 15% of Indian-born residents aged 25 and older had no more than a high school degree, compared to 39% of US-born residents in that age group.
Meanwhile, 82% of all Indians in the US (compared to 72% of all Asians) and 77% of foreign-born Indians were proficient in English.
Higher education mapped on to high income levels with direct implications for remittance flows. In 2019, the median household income for Indians in the US was nearly $120,000 compared to about $70,000 for all Americans.
The structural shift in qualifications and destinations has accelerated growth in remittances tied to high-salaried jobs, especially in services, the World Bank report showed.
During the pandemic, Indian migrants in high-income countries worked from home and benefited from large fiscal stimulus packages.
Post pandemic, wage hikes and record-high employment conditions supported remittance growth in the face of high inflation.
Second, the economic conditions in the GCC (30% share of India’s remittances) also played out in India’s favour. The majority of the GCC’s Indian migrants are blue-collar workers who returned home during the pandemic.
Vaccinations and the resumption of travel helped more migrants to resume work in 2022 than in 2021. GCC’s price support policies kept inflation low in 2022, and higher oil prices increased demand for labour, enabling Indian migrants to increase remittances and counter the impact of India’s record-high inflation on the real incomes of their families.
Third, Indian migrants may have taken advantage of the depreciation of the Indian rupee vis-à-vis the dollar (10% between January and September 2022) and increased remittance flows, World Bank noted.