Remittances from overseas Indian workers to fall: Study

The Asian Development Bank warned of a fall in remittances, with companies worldwide laying off employees, including Indians, to align their capacity in line with lower demand.

Broadly, overseas Indian workers are located in two regions -- the Middle East and developed countries such as the United States, United Kingdom and Canada, ADB said in a study. 'We see remittances from both major markets -- the Middle East as well as G7 economies (United States, United Kingdom and Canada) -- weakening,' the study released on Monday said.

The workers in the Middle East are mostly unskilled labour employed in construction and oil-related services while overseas Indians in the developed countries include skilled labour in the banking and information technology industry. 'Consequently, it is almost inevitable that remittances will decline,' the ADB report said.

Companies in developed economies will have to retrench workers including overseas Indians as weak demand forces them to align their capacity with lower demand, the study said.

Remittance outflows from the Middle East are linked to oil prices. As oil revenues fall substantially below expected levels, spending on construction and such areas where overseas Indians work will fall and reduce the demand for such workers.