Synopsis: Remittances sent by Indian workers employed in the Gulf act as a financial link between the region and also for the nation’s economy to some extent. The six nations of the Gulf Cooperation Council hold a significant share of India’s global remittance inflows. These funds support household spending and indirectly contribute to economic activity and GDP growth in India.
India has long shared strong labour and economic ties with the Gulf region. There are millions of Indian workers who are employed across sectors such as construction, oil and gas, healthcare, retail, hospitality, and transportation in Gulf economies. The income earned abroad and sent back to India plays an important role in supporting families and also contributing to domestic economic activity.
In the Reserve Bank of India’s (RBI) March 2025 Bulletin, 38% of India’s total remittance inflows have come from GCC countries. These flows along with helping their own families also contribute indirectly to India’s GDP.
GCC And The Nations
The Gulf Cooperation Council also called GCC was established in 1981 for economical alliances. It was formed majorly to promote economic integration among the six Gulf nations. The six member nations are:
- United Arab Emirates
- Saudi Arabia
- Kuwait
- Qatar
- Oman
- Bahrain
These countries have now become major destinations for workers from South Asia. The migration of many professionals between India and the Gulf has resulted in large volumes of remittances flowing into India each year.
Remittances from Gulf Nations to India
Data for FY 2023-24 shows that these six countries together account for around 38% of India’s total remittance inflows.
| Gulf Country | Share of Remittances (%) | Estimated Value (₹ lakh crore) |
| UAE | 19.2 | 1.89 |
| Saudi Arabia | 6.7 | 0.66 |
| Qatar | 4.1 | 0.40 |
| Kuwait | 3.9 | 0.38 |
| Oman | 2.5 | 0.25 |
| Bahrain | 1.5 | 0.15 |
| Total GCC | 38.0 | 3.74 |
Data for FY 2023-24 | Source: RBI Data & ET Research
This means nearly ₹3.74 lakh crore worth of remittances flow into India from the GCC region. This shows how migrant earnings from these economies indirectly support India’s domestic economic activity.
Country-wise Contribution to India’s Remittance Inflows
- United Arab Emirates: The United Arab Emirates is the largest source of remittances to India from the GCC. It alone holds about 19.2% of India’s total remittance inflows and that is an estimated value of ₹1.89 lakh crore. The country hosts one of the largest Indian expatriate populations globally with millions employed in various sectors. The main cities like Dubai and Abu Dhabi have become the first chosen hubs where Indian workers and professionals contribute significantly to the local economy.
- Saudi Arabia: Saudi Arabia is another major contributor and it accounts for 6.7% of India’s total remittance inflows. Saudi Arabia hosts a large number of Indian workers distributed in infrastructure, energy services, healthcare, and construction sectors. The migration corridor between India and Saudi Arabia remains one of the largest labour migration routes in the world.
- Qatar: Qatar contributes about 4.1% of India’s remittance inflows. The rapid infrastructure expansion of the nation especially during preparations for global sporting events and development projects created significant employment opportunities for Indian professionals and labourers.
- Kuwait: Kuwait contributes around 3.9% of India’s total remittance inflows. A large number of Indian migrants in Kuwait work in sectors such as oil and gas services, healthcare, retail, and domestic services. The economic ties between India and Kuwait have been consistent remittance flow over the years.
- Oman: Oman accounts for about 2.5% of India’s remittance inflows and is estimated at ₹0.25 lakh crore. Indian workers in Oman are employed across various sectors. The Indian population in Oman has played an important role in economic and cultural ties between the two countries.
- Bahrain: Bahrain contributes roughly about 1.5% of India’s remittance inflows. The number may seem a bit less when compared to other GCC total remittances but it hosts a sizable Indian workforce employed in finance, hospitality, and service sectors.
How These Remittances Contribute to India’s GDP
It is true that remittances are not counted as direct domestic production. However, they are important as they play an indirect role in supporting the GDP of the country. The funds sent by migrant workers increase consumption, investments in housing and education, and help expand small businesses in many Indian states.
These inflows also strengthen India’s foreign exchange reserves and help maintain balance in the current account. Majorly because remittances tend to remain stable even during economic downturns they act as a reliable financial cushion for the economy.
Conclusion
The six countries of the Gulf Cooperation Council contributed to nearly ₹3.74 lakh crore which accounts for around 38% of total remittance inflows. The Gulf remains one of the most important financial corridors for the country. Even though these earnings originated abroad, they do indirectly contribute to India’s GDP.
Written by Kenbi Riba
