Remittance to India from the Gulf shrinks

DECCAN CHRONICLE. | KAMALAPATHI RAO H
Published Nov 10, 2017, 6:24 am IST
Updated Nov 10, 2017, 6:24 am IST
Reasons are oil crisis and cancellation of projects in GCC.
Remittances to India from the Gulf countries is declining by the year.
 Remittances to India from the Gulf countries is declining by the year.

Hyderabad: Remittances to India from the Gulf countries is declining by the year. Foreign exchange remittances to the country have dropped by 20 per cent in the past three years. As per a report published by the World Bank, the first fall was recorded in 2015. Foreign exchange remittances in 2014 amounted to $70.4 billion in 2014, but only $68.9 billion in 2015. The 2.2 per cent fall in inflow from the Gulf broke records from six years before 2014. There was a nine per cent drop from 2015 to 2016-17, with only $62.7 billion coming in. However, a report of the Reserve Bank of India says there was a 12 per cent drop in 2016-17, with `3.66 lakh crore coming in compared to Rs 4.38 lakh crore in the previous fiscal year.

Kerala accounts for 36 per cent of the remittances received from the Gulf, while Telangana, Andhra Pradesh and Gujarat also get significant contributions. Mohammed Ali Shabbir, former minister of NRI affairs in the erstwhile state of united Andhra Pradesh, says that the Gulf countries have been facing a crude oil crisis since 2013-14. “The price of crude oil was between $150 and $157 per barrel in 2013-14, after which it began falling. Though the governments of the Gulf countries managed to deal with the crisis until 2015-16, they were soon rendered helpless. The prices have fallen to $50 per barrel now. This has a direct impact on employment, and an indirect impact on the foreign exchange remitted to India and other Asian countries,” he says.

 

India receives the most remittances from the Gulf. “Indian workers are suffering due to the cancellation of mega projects in Dubai, Qatar and the Kingdom of Saudi Arabia.  After India, China receives the second highest amount in the form of remittances from Gulf,” Mr Shabbir says. Sheik Abdullah, an NRI from the city who has settled in Riyadh, says that the situation of NRIs in the Gulf is different from the situation of NRIs in other countries. “An NRI settled in the US or UK can purchase properties and invest in businesses. The children of such NRIs get citizenship of those countries. In the Gulf, we do not have the privilege to purchase land or make investments while living here on work visas. Our children aren’t citizens of Gulf countries. This is why a majority of the NRIs here send their salaries to India,” he says. He adds that workers in countries such as Saudi Arabia, Kuwait, Qatar, Oman, UAE and Bahrain are forced to agree to work for lower pay because of the lack of job opportunities.

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Location: India, Telangana, Hyderabad




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