India is the top recipient of remittances globally, according to the World Migration Report 2024. This is something which shows no sign of abating since a recent Economic Survey suggests that remittances to India are projected to grow by 4 per cent in 2025, helping drive the country’s economic growth further.
“Remittances have been one of the most vital components of India’s growth machine. India is the world’s leading recipient of cross-border payments, according to both the 2024 World Migration Report and the World Bank’s latest Migration and Development brief. The 2023-24 Economic Survey released by the government of India projected inflow of cross border payments to grow to $124 billion in 2024 and to $129 billion in 2025. These funds play a vital role in supporting families, fuelling local businesses, and driving economic growth across the nation,” says Thampi Sudarsanan, CEO, LuLu Exchange.
Whilst these remittances that contribute to India’s GDP come from across the globe, the UAE and other nations within the GCC count for a large percentage.
“The UAE, the leading source of remittances to India, contributed 18 per cent of the total inflow, amounting to $21.6 billion in 2023. It will continue to be a major driver of remittance growth, alongside the US and other GCC countries,” says Ali Al Najjar, COO of Al Ansari Exchange.
With positive framework and agreements in place, which includes India’s Unified Payments Interface (UPI), the outlook for the future is bullish.
Future trends
“Supportive agreements and policies between India and the UAE, such as India’s integration of its UPI with the UAE, contribute to a more efficient remittance process,” Al Najjar says.
“The Comprehensive Economic Partnership Agreement in 2022 has expanded economic ties between India and the UAE, leading to a notable increase in trade. The streamlined system has enhanced financial inclusion in India, broadening access to financial services. Moreover, this agreement has fortified economic ties between India and the UAE, enriching the remittance sector through strengthened financial connections,” explains Al Najjar.
Thanks to stronger financial connections, faster transactions can be achieved through digitisation and exchange houses are adapting in readiness.
Digitisation accelerates growth
“There is little doubt that the long-term future of the cross-border payments sector in the UAE is digital,” says LuLu’s Sudarsanan.
“Digital innovation is how we are going to meet the United Nation’s Sustainable Development Goal of reducing remittance costs worldwide to below 5 per cent while continuing to provide the most efficient and secure cross-border payment solutions to customers. This is a future that we are already building with the LuLu Money app.”
Whilst digitisation is revolutionising the ease and speed of transfers, enhancements featuring Artificial Intelligence (AI) are set to transform the industry further.
Malaz Mubaid, Acting CEO & Chief Operating Officer, Wall Street Exchange, says, “Artificial Intelligence is set to revolutionise transactions with innovations such as voice-enabled payments and virtual cards, significantly enhancing security and safety. When combined with instant payment platforms like Aani by the Central Bank of the UAE and India’s UPI, these technologies will make cashless transactions more seamless and secure. This presents an opportunity for us at Wall Street Exchange to leverage fintech solutions to streamline remittances, offering our customers a more efficient and secure way to manage their financial transactions.”
However, for any customers who might be reticent to embrace digitisation, lucrative promotions could change their minds. Thus, in a bid to encourage customers, marketing strategies are already in play.
Sudarsanan suggests, “Exchange houses in the UAE, including LuLu Exchange, have introduced various offers and promotions to attract customers and encourage digital adoption. Such promotions have played a crucial role in encouraging expatriates to remit money through official channels. By making official cross-border payments more rewarding, these promotions benefit both customers and exchange houses.”
With the local exchanges offering rewarding promotions and easy transactions, remittances between the UAE and India can surely only prosper.
