Non-resident Indians are remitting more money in India

By Vipin Agnihotri

As expected by many of the experts, it’s official that Non-resident Indians (NRIs) are remitting more money back home. The India Street has been informed that individual remittances from Indians working abroad have surged 50 per cent at $8.6 billion in the first quarter of 2007-08, as compared to $5.9 billion in the year-ago period.

In my opinion, healthy NRI remittances have played a prominent part in offsetting the increasing current account deficit of $4.7 billion during the first quarter ended June this year. It is worth mentioning in this regard that although the US has seen a slowdown, Europe and West Asia have shown strong growth as a source for remittance into India.

Point to be noted here is that West Asia is riding on peak oil prices, also giving rise to a construction boom. In terms of statistic, OPEC exports touched $649 billion last year and the oil boil shows no sign of cooling.

According to sources, the inflows are surging by the day. As a matter of fact, during January-June 2007, remittances by the Indian diaspora almost touched $17 billion.

I spoke with Reserve Bank of India officials and they were of the view that during April-June 2007, NRI deposits saw a net withdrawal of $447 million, which by the way is one of the highest outflows in 12 quarters.

Initial signs are that plenty of this money is used by the relatives to invest in number of assets in the local markets as the NRI ends up earning a higher return.

It’s not really surprising that NRIs are very much interested in jumping onto the India growth story. Real estate sector has been a huge hit among them. In my opinion, majority of NRIs are buying land both as an investment and also to secure a pad for possible return home.

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