The Indian rupee slid to a record low of ₹88.36 per US dollar this week amid fears of new US tariffs and global economic uncertainties. The Reserve Bank of India, the nation’s central bank, reportedly intervened to cap further losses. On August 29, the rupee breached the ₹88 mark, touching ₹88.29. These are among the weakest points for the rupee in recent memory, but one group will benefit: Indian expats sending money home.
India is the largest recipient of global remittances
In the fiscal year 2024–25, India received a record high of $135.46 billion in inward remittances. That marks a steady growth. In 2024, remittance inflows climbed to around $129 billion, according to the World Bank, up from an estimated $125 billion in 2023. The figure was about $111 billion in 2022.
Why a weaker rupee is a boon for NRIs sending money home
A weaker rupee benefits Indian expatriates by enabling them to convert every dollar, or other foreign currency, into more rupees, increasing the value of their remittances. For example, at ₹88 to a dollar, $1,000 becomes ₹88,000 instead of, say, ₹82,000 — a gain of ₹6,000.
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This gives greater purchasing power to the recipients of these remittances. Whether for household needs, education, investment, or savings, they gain more value.
So, the drop in the rupee rate, driven by US tariff concerns and foreign exchange volatility, is in a way helping this segment of Indian society.
Who is sending money to India? Origins and destinations
The United States is the key source country in terms of value of remittances, accounting for around 27.7 per cent of total flows. The UAE (19.2 per cent) and the UK (10.8 per cent) are also among the top countries. Remittances of about ₹500,000 account for 28.6 per cent of the total inflows. Smaller transactions — ₹16,500 or less — make up 40.6 per cent.
States with high remittance inflows include Maharashtra (20.5 per cent), Kerala (19.7 per cent), and Tamil Nadu (10.4 per cent).
Indian rupee fall trends and effect on remittances
The rupee has been falling in recent months, dropping to ₹87.29 per US dollar in February. Historically, a weaker rupee always encouraged NRIs to remit money more frequently and in larger amounts. The 2018 rupee depreciation to 69.62 per US dollar caused a 25 per cent volume spike in remittances from the UAE.
The current depreciation — around 3.6 per cent over 10 months — is showing a similar effect, particularly among skilled migrants in high-income countries.
Easier now to send remittances, but challenges remain
Digital infrastructure for sending money, including platforms like UPI, has improved the remittance process by reducing costs, increasing transaction speed and boosting volumes.
But challenges remain. Any global slowdown, or headwinds like falling oil prices and economic uncertainties, could impact remittance inflows. There is also the risk of countries changing their visa and immigration policies, which could affect future remittance volumes.