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The Hindu
The Hindu
National

Data | Pandemic impacted blue-collared Indian migrants in Gulf more than salaried workers in U.S.

Remittance inflows have recorded an upward trend despite the pandemic. According to a recent RBI report, there was a disproportionate decline in the wages of Indian-origin blue-collared migrants working outside India compared to white-collared workers in FY21. There was a decline in remittance inflows from the Gulf region in FY21 compared to FY17, whereas remittance inflows from countries such as the U.S., the U.K., and Singapore, which have a higher share of Indian-origin white-collared workers, increased significantly. The pandemic also significantly altered the dominance of certain Indian States which were usually considered the biggest recipients of remittances. In FY21, Kerala, which was at the top of the recipient list in FY17, recorded a marked fall in remittance receipts. Maharashtra replaced it as the top recipient. Karnataka too recorded a sharp decline, while Delhi and Tamil Nadu gained remittances. Financial distress among the remitters was also evident as there was an increase in transactions of smaller denominations in 2020-21 compared to 2016-17

As a % of GDP

The chart shows remittances as a share of India’s GDP (a lower-middle income country) and the average for low- and middle-income countries. Despite the pandemic, the share of remittances increased from the lows recorded between 2015 and 2017.

Charts appear incomplete? Click to remove AMP mode

Source of remittance

The chart shows the remittance inflow from different countries to India in FY21 (orange) and FY17 (blue). The U.S. replaced the UAE as the highest source of remittance in FY21. There was a significant decline in the remittances sent by workers from the Gulf region in FY21 as compared to inflows from the U.S., the U.K., and Singapore.

State-wise share

The chart shows the share of a State in India’s overall remittance inflows in FY21 (orange) and FY17 (blue). Maharashtra replaced Kerala as the top recipient during the pandemic. Apart from Kerala, a major decline was also recorded in remittances sent to Karnataka.

Smaller transactions

The chart shows the average size of each remittance transaction in FY21 (orange) and FY17 (blue). There was an increase in transactions of less than $200, which may indicate a reduced sending capacity of overseas workers

Source: Headwinds of COVID-19 and India’s Inward Remittances, RBI

Also read: The importance of emigrants

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