Washington, April 15: India’s Chief Economic Advisor, V. Ananth Nageswaran, warned on Wednesday that prolonged economic disruptions in the Gulf region could significantly impact remittances flowing into India. He estimated that the country might face losses of up to $10 billion.
Speaking at the US-India Economic Forum 2026, Nageswaran highlighted that political tensions and economic downturns in the host countries where Indian workers reside could directly affect the remittances sent back home.
In the fiscal year 2024-25, India received approximately $124 billion in remittances, one of the highest globally, with nearly half of this amount coming from Indian laborers working in Gulf nations.
He noted that if normal economic activities take time to resume, there would likely be some impact on remittances from the Gulf. The extent of this impact would depend on the severity of the situation and the duration of the disruptions, with potential losses ranging from $5 billion to $10 billion.
Nageswaran pointed out that several factors contribute to this risk, including the return of workers due to conflict, a slowdown in economic activities in host countries, and uncertainty regarding job security.
The Gulf region serves as a major employment hub for Indian migrant workers, particularly in sectors like construction, services, and energy. Prolonged disruptions could lead to reduced earnings for these workers and delays in their return to work.
This concern arises amid ongoing global uncertainties in trade, energy markets, and capital flows. Nageswaran stated that remittances are one of four major channels through which these external shocks could impact India.
Despite these challenges, he reassured that India’s economy remains in a strong position, supported by a healthy foreign exchange reserve and diverse sources of income.
He emphasized that India is entering this situation with a robust macroeconomic foundation.
As the country with the largest migrant population in the world, millions of Indians work abroad, with Gulf Cooperation Council countries being among the top destinations for Indian laborers, thus holding a significant share in India’s remittances.
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