Growing remittances reflect talent drain

It is significant the remittances flowing in from emigre Indians more than doubled to $118.7 billion in 2024-24 from $55.6 billion in 2010-11. These remittances are an important source of foreign exchange, and the robust inflow has financed as much as 42 percent of the merchandise trade deficit in the 13-year period since 2011, a Reserve Bank study shows. Migration of Indians in search of better pastures has been galloping—it has tripled to 18.5 million in 2024 from 6.6 million in 1990. The country’s share in global migration has risen to 5 percent from 4.3 percent in 2011. Though the Gulf states still account for more than half the Indian diaspora abroad, the study shows that it was money from the US, UK, Canada, Singapore and Australia that made up more than half the remittances in 2023-24. The US topped the chart, accounting for 27.7 percent.

The RBI study has proven anecdotal evidence that the bulk of Gulf remittances are from low-paying jobs and their share has declined to 19.2 percent from a high of nearly 27 percent in 2017. Correspondingly, the new emigres moving to the US and elsewhere are more qualified and in higher-earning sectors such as management and science. Predictably, the more educationally advanced states of Maharashtra, Kerala and Tamil Nadu accounted for over half the $118 billion in remittances. Maharashtra—specifically Mumbai—topped the flow; but Tamil Nadu and Kerala also showed robust growth in repatriated money.

While the inflow from our offshore brethren has made families and communities more secure, it must be conceded the continued flight of talent reflects the weak economy, increasingly unliveable cities and the lack of opportunities at home. The impact of the brain drain can be felt in the economy as industries are increasingly facing skill shortages. An Expat Insider 2021 survey showed that 59 percent of Indians working abroad relocated for their career, a much higher share than the global average of 47 percent. In the light of the US deportation drive of ‘illegal migrants’, it is time the government takes up a vigorous drive to stem the desperation of young people. It will only bear fruit if we create careers and opportunities at home for them.