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India Cashes in on Foreign RemittancesFriday, February 08, 2008
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. |
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