India Cashes in on Foreign Remittances

India is riding high on money transfer from abroad, thanks to the
growing ranks and changing composition of Indian emigrants. The rise
in the figure is quite astounding inward remittances, which totaled
around $11 billion in 2001-02, touched $27.2 billion in 2006-07 and
are expected to cross $30 billion in 2008-09. Today, India accounts
for one in every ten dollars remitted home by immigrants worldwide.

According to Harsh Lambah, regional director of South Asia with MoneyGram
India, the Indian remittance business is growing by 15% a year. ICICI
Bank, which has a quarter of the Indian remittance market, expects business
to continue growing at 12% a year.

Kerala which has always been the highest grosser of inward foreign
currency remittances so far, may soon lose its place to states like
Gujarat, Punjab, Tamil Nadu, Andhra Pradesh and Maharashtra, mainly
because of change in profile of migrants, who now include traders and
professionals like techies, bankers, fund managers, doctors and lawyers
who have emigrated to the US, Europe, Africa, Hong Kong and Singapore.

"North America is a major contributor to remittances, overtaking
Gulf countries. Today, 44% of the remittances into the country is from
North America, followed by the Gulf at 24% and European countries, which
contribute 13%," said Lambah, whose company has increased its Marketshare
from 1.6% in 2002 to 4% in 2006.

Remittances from countries like the UK, Australia, New Zealand and
Canada are also rapidly catching up because of the demand for skilled
Indian labour, say those in the business of money transfers.

"India is one of the fastest growing remittance Markets in the
world largely due to the number of Indians migrating to developed countries.
The Indian remittance market has been growing at 20% annually since
2001," said Anil Kapur, managing director, South Asia, with Western
Union.

NRIs are also investing heavily in real estate and equity Markets through
mutual funds, besides deposits that are also gaining popularity due
to higher domestic rates. Currently, the remittance business accounts
for 3% of India’s GDP. While the worldwide remittance business, which
is growing at 8% a year, stood at $269 billion in 2006-07.

Photo: Hyderabad Hitech City – residential street with gate that only lets by Syced, licensed under CC0, via Wikimedia Commons.