NEW DELHI: Despite making up only about one-quarter of India’s overseas population, Indian nationals in Gulf states send almost 40 percent of the country’s bank remittances, the latest data shows.

India’s diaspora is one of the largest, accounting for 35.4 million people, based on last month’s estimates submitted to parliament by Minister of State for External Affairs Pabitra Margherita.

Members of the diaspora are a key source of India’s foreign currency inflows and, in the fiscal year 2023–24, sent home $118.7 billion, according to a remittances survey released in March by the Reserve Bank of India.

Indians living and working in the six Gulf Cooperation Council countries accounted for almost 40 percent of this amount, led by those in the UAE, Saudi Arabia and Qatar — 19.2 percent, 6.7 percent and 4.1 percent, respectively.

The 40-percent remittance share from Gulf-based Indians is disproportionately high compared to their share of the overall diaspora. Of the 35.4 million Indians living abroad, only 9.7 million — just slightly more than one-quarter — reside in GCC countries, according to data from India’s Ministry of External Affairs.

Dr. S. Irudaya Rajan, chair of the International Institute for Migration and Development in Thiruvananthapuram, Kerala, attributes the imbalance to the nature of Indian migration in the Middle East.

“People who go to work in the Gulf don’t plan to settle there, but work and bring money home and support the family ... they are coming to make money and secure their future in India,” Rajan told Arab News.

“They went to earn money with double work, midnight work, evening work, overtime work to send it back home.”

The reason why many of them are able to save and send more is that most travel to Gulf countries alone, focusing on work as there are no prospects of obtaining citizenship — unlike in other major migration destinations like the US and UK.

Out of the 4.3 million Indians living in the UAE, 2.65 million in Saudi Arabia, 1 million in Kuwait, 830,000 in Qatar, 665,000 in Oman and 350,000 in Bahrain, the majority were either unmarried or had their family waiting for them back home.

“Eighty percent of them are living alone ... they are not taking their wives, they are not taking their children,” Rajan said.

“Either they are unmarried and are sending money to their parents, or they are married and sending it to their wives and their parents, or they are sending it to their children studying in some other country.”

The actual amount of remittance coming from overseas Indians was likely much higher than what the central bank indicated. While the RBI’s survey covered 30 banks, two money transfer operators and two fintech companies in the cross-border remittance business, inward remittances from the Gulf also reach India through informal means.

Given the region’s proximity and frequent and cheap flights, money can be easily brought from places like Dubai without relying on bank transfers — unlike remittances from Europe, Singapore, or the US.

“From the informal channel, it can be as much as the formal channel,” Rajan said.

“All estimates on remittances are underestimated. The government of India, the World Bank, the RBI — all will underestimate the remittance because they can calculate it only from the formal channel.”

While the central bank’s data has shown an increase in the remittance share from the West and a drop from the Middle East compared with the previous survey in 2016-17, Rajan forecast that the Gulf will still continue to play a major role.

“These remittances coming from Canada, Australia (and the US), are more because they are vacating the place and coming home. People who are coming from America will bring all their savings, all that they had in America, so this is a short-term trend,” he said.

“I think the Gulf will bounce back ... the future will be very uncertain for migration, but Gulf migration will continue for at least the next 15 to 20 years.”