The past ten years have seen a notable devaluation of the Indian rupee, which has significantly increased the remittance power of non-resident Indians worldwide, particularly in the US and the GCC. This has resulted in a spectacular increase in inward remittances to the third-largest Asian economy.
Over the past ten years, the rupee’s value has declined from approximately Rs60 to approximately Rs83.31 against the US dollar, which has caused a commensurate reduction in the rupee’s value versus the dirham, which is pegged to the US dollar.
The rupee’s steep decline in value has resulted in the largest-ever inflow of remittances into India in 2023—a total of $125 billion. As per the World Bank, the agreement between India and the UAE to promote the use of rupees and dirhams for bilateral trade is one of the other factors contributing to the spike. The World Bank said in research that from a historical high of 24.4% in 2022, growth in remittances from India is predicted to cut in half to 12.4% in 2023. India’s foreign exchange reserves rose from $304 billion to $645 billion in just ten years.
