Daijiworld Media Network - Washington

Washington, Apr 16: India’s inflow of overseas remittances could face significant pressure if ongoing economic disruption in the Gulf region continues, with potential losses estimated between $5 billion and $10 billion, Chief Economic Advisor V. Anantha Nageswaran said on Wednesday.

Speaking at the US-India Economic Forum 2026, Nageswaran highlighted the sensitivity of remittance flows to geopolitical instability and economic slowdowns in key destination countries for Indian workers.

India received around $124 billion in remittances in 2024–25, making it one of the world’s largest recipients. Nearly half of these inflows originate from workers employed in the Gulf region, including countries in the Gulf Cooperation Council.

He cautioned that prolonged disruption in the region could affect earnings and employment conditions for migrant workers, particularly in sectors such as construction, services, and energy. Reduced economic activity or the return of workers from affected areas could further weaken inflows.

Nageswaran noted that the estimated impact depends on how long instability persists and the extent to which normal economic activity is restored in host countries.

Despite the risks, he stressed that India’s macroeconomic fundamentals remain strong, supported by robust foreign exchange reserves and diversified capital inflows. He added that India is entering the situation from a “solid macroeconomic platform.”

India, home to one of the world’s largest diaspora populations, relies heavily on remittances as a stable external financing source, with Gulf nations playing a particularly crucial role in sustaining these inflows.