InvestorQ : Do you see the global lockdown impacting the remittances from NRIs into India? What could that mean?
diksha shah made post

Do you see the global lockdown impacting the remittances from NRIs into India? What could that mean?

Answer
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Dia Deshpande answered.
1 month ago


There have been apprehensions for some time that foreign remittances from NRIs, a major source of forex inflows for India, could get hit by COVID-19. Now there is official confirmation based on data. The Asian Development Bank has actually estimated that the pandemic aftermath will compress foreign remittances into Asia by $55 billion in FY21.

It needs no reiteration that India gets a bulk of its flows from the Middle East nations. Apart from other global nations, the Middle East could end up having the biggest impact on remittance flows into India. The Middle East has taken a hit on the COVID slowdown and weak oil prices. There has been loss of jobs and also preference given to locals.

India had received over $77 billion in the form of remittances from NRIs, and a big chunk of the remittance loss of $55 billion estimated by ADB is likely to hit India flows. For India, this has larger repercussions on the current account as India was helped by foreign remittances to convert the current account deficit into a current account surplus last quarter.