India's remittance inflows have demonstrated remarkable resilience during the West Asia conflict, with net remittance inflows remaining strong at $16 billion in April compared to an average monthly inflow of $13.7 billion in Q4 FY26, according to latest Reserve Bank of India data. As reported by Business Standard, a senior banker at a private sector bank noted that remittance inflows have remained remarkably resilient despite the ongoing conflict in West Asia, with strong momentum continuing through May and the first half of June. The banker expects some moderation in growth as geopolitical tensions ease, but remittances are likely to remain broadly stable this year, supported by the diversification of India's remittance sources. "Remittance inflows have remained remarkably resilient despite the ongoing conflict in West Asia. The strong momentum seen in April has continued through May, and the first half of June, with both year-on-year (Y-o-Y) and month-on-month (M-o-M) growth remaining healthy," said the banker. "While we expect some moderation in the coming months because the current pace is unlikely to be sustained indefinitely, remittances in FY27 should still remain higher than last year. The conflict has not had the adverse impact on remittances that many had feared."
India's net inward remittances have been on a steady uptrend over the past five years, with FY26 remittances reaching $144.79 billion, up from $124.55 billion in FY25 and nearly $106.63 billion in FY24. According to Business Standard, the figure was $101.77 billion in FY23, $81.23 billion in FY22 and $74.44 billion in FY21. The United States remains the largest source of remittances to India, accounting for 27.7 per cent of gross inflows, followed by the UAE (19.2 per cent), the UK (10.8 per cent), Saudi Arabia (6.7 per cent) and Singapore (6.6 per cent). "Inward remittances were particularly strong in Q4FY26, with a notable increase in flows from Gulf-based non-resident Indians (NRIs). The rise appears to have been driven not only by underlying growth in the NRI population and remittance base, but also by geopolitical uncertainty in West Asia," said a second banker. "The inflows may moderate as the regional tensions ease. But, a sharp slowdown is not expected as the RBI's recent scheme on FCNR(B) deposits may support inflows in the near term."
Since the Covid-19 pandemic, India's dependence on remittances from GCC countries has gradually declined, reflecting a rise in the share of skilled Indian workers migrating to advanced economies such as the US, the UK and Singapore. As reported by Business Standard, Gaura Sen Gupta, chief economist at IDFC FIRST Bank, emphasized that India's remittance profile has become considerably more diversified over the years. She noted that while the GCC remains an important source, its share in total remittances has declined, with larger contributions now coming from the US and other advanced economies, providing a cushion against region-specific shocks. "It is also important to note that India's remittance profile has become considerably more diversified over the years. While the GCC remains an important source, its share in total remittances has declined, with larger contributions now coming from the US and other advanced economies. This diversification provides a cushion against region-specific shocks," she added. "Any moderation in one quarter could be offset by stronger inflows in subsequent quarters as economic activity in GCC countries stabilises, and reconstruction-related demand emerges."
India's balance of payment accounts saw a surplus in its current account during the fourth quarter of FY26, driven by high growth in India's service exports and remittance inflows. This led to a $7.2 billion rise in forex reserves during the quarter, as reported by Business Standard. However, FY26 saw one of the largest depletions in forex reserves due to a burgeoning merchandise trade deficit and significant FPI outflows. The strong remittance performance has provided crucial support to India's external accounts amid broader challenges from trade deficits and foreign fund outflows.
