Oil crash to hit NRI remittance

The crash in crude oil prices with a crippling impact on the economies of the Gulf nations would deal a severe blow to remittances to India, Pakistan and other Asian nations with a maximum possible impact on states like Kerala and Punjab, according to industry chamber Assocham.

“As the meltdown in crude oil is leading to a price war among the major oil producers and prices breaching 11-year low, major economies in the Gulf region have been caught off guard and their finances are going to come under a severe pressure. Besides fresh investment in the energy sector has come to a halt, leaving a negative spin off impact on a host of sectors like construction, tourism, real estate, banking and finance,” said Assocham.

While the RBI data for April-September, 2015-16 shows an uptick in the NRI deposits of $10.1 billion from $6.4 billion in the same period last year, Assocham said that the trend is bound to get adversely affected in a multi-pronged fashion, going forward.

The chamber said that for one, the number of workers, both the blue and white collar going to the Middle East on fresh recruitment is going to drop drastically while those already working in the region would find the going rather tough.

Of about 20 million NRIs spread in 110 countries, around six-seven million are in the Gulf states of whom two million are estimated to be from Kerala, said the chamber.

States like Punjab and UP which also send a sizeable number of workforce there would also be affected. it said.