Gulf Risks May Hit India Remittances: CEA​ Nageswaran

(MENAFN- IANS) Washington, April 15 (IANS) India's remittance inflows could come under pressure if economic disruption persists in the Gulf region, with potential losses estimated at up to $10 billion, Chief Economic Advisor V. Anantha Nageswaran said on Wednesday.​

Addressing the US-India Economic Forum 2026, Nageswaran highlighted the vulnerability of remittance flows to geopolitical tensions and economic slowdowns in key host countries.​

India received about $124 billion in remittances in 2024–25, making it one of the largest recipients globally. Of this, roughly half came from Indian workers based in the Gulf region.​

“To the extent that normal economic activity takes time to be restored... we should expect some sort of impact on remittances from Gulf workers,” he said.​

He estimated the potential impact could range from $5 billion to $10 billion, depending on the duration and severity of the disruption.​

Nageswaran said the risks stem from multiple factors, including the return of workers due to conflict, slower economic activity in host countries, and uncertainty around employment conditions.​

The Gulf region remains a key destination for Indian migrant workers, particularly in sectors such as construction, services and energy. A prolonged disruption could reduce earnings and delay workers' return to their jobs.​

The concern comes amid broader global uncertainties affecting trade, energy markets and capital flows. Nageswaran identified remittances as one of four major channels through which external shocks could impact India's economy.​

Despite the risks, he noted that India's external sector remains resilient, supported by strong foreign exchange reserves and diversified inflows.​

“We are entering into this situation with a very solid macroeconomic platform,” he said.​

India has the largest diaspora population in the world, with millions of workers employed overseas. The Gulf Cooperation Council countries account for a significant share of this workforce, making the region critical to India's remittance flows.

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