“The Indian economy has been a beneficiary of this dynamic and industrious diaspora. India currently receives the highest flow of remittances in the world at $ 108 billion in 2022, up by 24.6 per cent from a year ago, and accounting for 3 per cent of India’s GDP” RBI deputy governor Michael Patra said in his address at the Indira Gandhi Institute of Development Research (IGIDR) Alumni Conference, Mumbai. “Additionally, Indians residing abroad hold deposits in Indian banks cumulating to $ 136 billion at the end of February 2023”. The country’s foreign exchange reserves are at $588 billion as of April 28, 2023.
Undescording the contribution of the diaspora, Patra noted that over the years, India’s perceptions about the diaspora have also transformed from ‘brain drain’ to ‘brain gain’, spurred by the contributions that Indians have made in various fields in the global arena, including information technology, entrepreneurship, international politics, medicine, arts and culture, with some of them becoming Nobel laureates.
An outward reflection of India’s demographic bonus is the vibrant expansion of Indian communities across the world. ” India has always been an open economy and international migration has been a major force defining India’s economic, social and political relations with the rest of the world right from the Bronze Age in 3000 BC ” Patra said.
Besides, the Indian economy is undergoing a quiet but fundamental transformation encompassing all its sectors. “Perhaps the most striking transformation is occurring in India’s exports of services which have demonstrated pandemic-proofing, rising by above 25 per cent per annum since 2020, and providing valuable support to the viability of the external sector” Patra said.
India is home to about 40 per cent of world’s Global Capacity Centres, and they are estimated to comprise 25 per cent of overall IT services exports, according to Patra. GCCs are also driving diversification, with firms in diverse sectors such as electronics, retail, automotive, banking and financial services, and hospitality, to name a few, setting up GCCs in India.