The amount of money sent by NRIs is likely to be $58 billion in 2011, slightly ahead of China's estimated receipts of $57 billion, says the World Bank. With this, India would beat China in receiving the highest remittances globally for five years in a row, from 2007. Countries such as Mexico and the Philippines were among the other top recipients of remittances from their respective emigrants.
According to RBI data, money sent to India by NRIs increased 13.3 per cent (to $45.6 billion) for the first nine months of 2011, compared with the first nine months of 2010. Inflows expanded 7.9 per cent for a similar period in 2010 over 2009. Remittances in 2010 accounted for 3 per cent of India's GDP.
These remittances, also called personal transfers, do not include NRI deposits in banks here. The transfers are used for consumption by the NRIs' families or invested in options such as property. They contribute to the local economy. The rupee depreciation against major currencies may have driven remittance flows in recent times. When the rupee depreciates, every dollar or Saudi riyal yields more rupees back home.
Remittances from NRIs saw a sharp pick-up in the September quarter over the previous three-month period. As against the 3-4 per cent quarterly growth in remittances in 2010 and first half of 2011, remittances in the September quarter jumped 9.8 per cent over the previous quarter.
High inflation, too, could have triggered NRIs to send more to their families to meet the price rise on their food bill and higher interest on domestic loans.