UAE-India remittance corridor continues to grow: report

A recent white paper commissioned by Friends Provident International (FPI) and published by the Economist Intelligence Unit (EIU), reveals the hidden costs that expatriates living and working in Dubai and Abu Dhabi may face.

In stark contrast with other expatriate nationalities in the UAE, non-resident Indians (NRIs) are one of its most financially prudent expatriate groups.

“We see that NRIs, be they high or low-income earners, have incredible financial discipline and their culture of saving makes them a great case study, highlighting the value of careful financial planning,” said Marcus Gent, Managing Director, Middle East and Rest of the World at FPI, a financial services company.

Much of the money remitted is used for family support.

India’s less developed pension system, compared with Europe or North America drives expatriates towards supporting their parents and children rather than starting a retirement plan for themselves.

Financial planning

Over 80 per cent Indians in the UAE have been two and five dependents to support, many of these back home in India, it said.

Culturally, Indians consider the education of their children and paying for their wedding as fundamental financial planning requirements. Some 90 per cent invest heavily in their children’s education, in the expectation that this will help them with their career and to lead more fulfilling lives.

Remitting money from the UAE to India is less expensive than from other locations.

The average cost of sending $200 (Dh734) to India from the UAE is about $5, while sending the same amount to India from Australia costs three times as much.

“Earning in dirhams could translate favourably into a comfortable retirement, especially given the current weakness of the Indian rupee. For investment opportunities, India is an attractive prospect for the savvy, better-off white-collar Indian investor- and remittance and investment flows from the UAE to India clearly confirm a continued and increasing appetite,” Gent said.

Indians form by far the largest foreign-born community in the UAE, and an increasing number of professionals are relocating to the country. The Indian embassy in Abu Dhabi lists over 40 major Indian companies.   Gulf News