India's remittance income from US rising: study

Monday, 26 July 2004, 07:00 Hrs
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NEW DELHI: India's remittance income from the US is increasing at a rapid pace as more and more skilled and semi-skilled professionals migrate to the world's largest economy, says an industry study.

According to the Confederation of Indian Industry (CII) survey, India's remittance income from the US, largely attributable to Indian professionals in that country, touched $4.5 billion in 2003.

This figure roughly corresponds to around 7.5 percent of India's total goods exports earning for the same year.

Remittances from the US are almost double that from the European Union. While remittances from the US grew by 28.5 percent during 2000-03, the corresponding figure for the European Union was 25 percent, said the study.

The report said India had contributed the largest number of skilled professionals to the US during the period 1985-2000.

"While a substantial proportion of such skilled persons was a part of the IT boom in the 1990s, estimates suggest that the IT workforce does not comprise the majority of skilled Indians working in the US," said the CII report.

Indian presence in the US includes laboratory research in natural sciences, pharmaceuticals, biotechnology and applied technology. Medical, legal, financial and education sectors too employ large numbers of Indians in the US.

The report said given the growing importance of services trade, the presence of large numbers of Indians in such a wide range of high-end areas in the US was a good indication of India's global comparative advantage.

It noted that India and the US would gain from interaction of skilled people and the two countries would establish a mechanism to set rules of such an engagement in a transparent and explicit manner.

"The existence of such a mechanism will remove uncertainty among stakeholders and enable a successful and wide-ranging relationship," said the report.

Riding on the back of a "feel-good" factor in the Indian economy, overseas Indians remitted a record $18 billion in 2003, making the country the largest recipient of private transfers globally.

According to balance of payments figures released by the Reserve Bank of India (RBI), workers' remittances to India rose to a staggering $18.2 billion in the last calendar year, posting a growth of as much as 30 percent over 2002.

Remittances, or money sent home by emigrant Indians, are pushing India to the top slot among all developing countries-accounting for about five times the country's foreign direct investments per year.

They are also sharply higher than India's famed software earnings. Hardworking youngsters in the Middle East, Britain, Canada and the US have changed many a life in India.

An estimated 20 million Indians live abroad, spread across continents, with strong concentrations in North America, Europe, Africa, the Gulf, Southeast Asia and Australasia.

Source: IANS
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