(UNITED KINGDOM) The United Kingdom has emerged as the fastest-growing source of money sent to India by its diaspora, pushing its share of India’s remittance inflows to 10.8% in the fiscal year 2023-24 from 6.8% in 2020-21. The shift is being driven by a growing Indian workforce and student community in the UK, steady employment and wages, and one of the cheapest money-transfer corridors in the world. India’s overall remittance haul remains enormous, crossing more than US $135 billion in FY 2024-25, and the UK’s rising contribution signals a change in where that money is coming from and how it is being sent.
For policymakers in both countries, the appeal of the UK-India corridor is clear. The cost of sending money from the UK to India has stayed low compared with other routes, helping remitters keep more of what they earn. In early 2024, average fees for transfers from the UK to India were reported at “below 3%”, well under the roughly 6% average for UK remittances overall. A typical transfer of £120 cost about £7.30, but India and Pakistan were singled out as the cheapest destinations even within that low-cost picture, aided by digital platforms and strong competition among providers. The result is that UK-based Indians—skilled professionals, students on tight budgets, and long-term residents—can send money home more often and at lower cost, and families in India receive more of what is sent.
The numbers tell a wider story about how India’s diaspora is changing its financial ties. According to data cited alongside the UK’s gains, the United States accounted for 27.7% of India’s remittances in 2023-24, the United Arab Emirates for 19.2%, the UK for 10.8%, Saudi Arabia for 6.7% and Singapore for 6.6%. Together, the US, UK and Singapore now provide about 45% of India’s total remittance inflows, reflecting a shift toward higher-skilled migration routes and away from traditional flows from Gulf states.
“The strong growth in remittances has persisted despite weakness in crude oil prices. This is a result of rising share of the skilled labour force migrating to developed markets such as the US, UK and Singapore. As per RBI data, these three countries account for a 45% share in total remittances. Meanwhile, the share of GCC countries has been reducing,” said Gaura Sengupta, Chief Economist at IDFC First Bank.
India’s diaspora sends home more than any other country’s, and 2024-25 extended that lead. Total remittances reached about US $135.46 billion, up 14% from the previous year. That wave of money matters beyond family budgets: remittances helped cover nearly 47% of India’s merchandise trade deficit of $287 billion in FY25, giving the economy a more stable source of foreign exchange than volatile capital flows. In a period of shifting global interest rates and slowdowns in some sectors, the consistency of remittances—from the UK, the US, Singapore and still from the Gulf—has underpinned household consumption, savings and investment back home.
The UK’s rising share is tied to three strands that reinforce each other. First, the UK has drawn a larger pool of Indian students, professionals and long-term residents in recent years, strengthening community networks that support job searches, housing and financial habits like regular remittance schedules. Second, bilateral migration and mobility arrangements have made it easier for Indians to move to the UK for work and study, then stay to build careers, which in turn anchors remittance patterns. Third, the cost and speed of sending money from the UK to India have improved through digital channels, mobile apps and bank partnerships that compete on fees and exchange rates. When senders can compare options, push a transfer from a phone and see funds arrive rapidly in India, they are more likely to send smaller amounts more frequently, which keeps volumes high.
The corridor’s low costs are well-documented in global price databases that track what senders pay to move money across borders. For UK-to-India transfers, average fees have stayed under 3% through early 2024 and into Q1 2025, and online routes are typically cheaper than cash-based or in-person services. That structure is especially helpful to Indian students and younger workers in the UK who need to transfer modest sums or make payments on a strict budget. The small differences in fees compound over time: a worker sending £300 every month from London to Mumbai, Chennai or Ahmedabad will save hundreds of pounds a year compared with higher-cost corridors.
There is a broader social pattern behind the figures. The Migration Observatory at the University of Oxford has reported that about 32% of non-EU migrants in the UK sent remittances home in 2021/22, with India, Pakistan and Nigeria among the top destinations. In practical terms, remittance from the UK supports a wide range of needs in India: school fees, medical costs, homebuilding, elder care, and investments that would be harder without a steady foreign-currency income. In cities and towns across India, families time transfers to manage tuition payments or loan instalments, and many now coordinate transfers to take advantage of favorable exchange days and the lower fees on digital platforms.
India’s official data point to a diversification of remittance sources that policymakers have encouraged. For years, the Gulf Cooperation Council countries dominated inflows to India, reflecting the large number of Indian workers in the region. Those flows remain important, but the growing shares from the UK, the US and Singapore suggest a more balanced map of where Indian earnings abroad are coming from, and in many cases those earnings come from higher-wage, skilled jobs. That shift cushions India when oil prices swing or Gulf labor markets tighten, while it deepens ties with advanced economies where Indian professionals increasingly settle.
Inside the UK, this trend reflects the scale and composition of the Indian-origin community, one of the country’s largest and most established diaspora groups. Skilled migrants in sectors like technology, healthcare, finance and higher education have added to long-standing communities of entrepreneurs and family networks. As trade and services links between the UK and India grow, financial flows have followed, with remittance often acting as a first bridge for families before larger investments and savings decisions. Lower costs on the UK side make those links even more attractive to new arrivals deciding how and when to send money home.
For Indian families receiving funds, cost awareness matters. A sender in Birmingham choosing a digital transfer provider that charges “below 3%” and offers strong exchange rate conversion can add thousands of rupees to a single transfer compared with costlier routes. Receiving families in India increasingly use bank accounts linked to mobile apps to track incoming funds and move them into savings or to pay bills, reducing the need for cash pickup and cutting risks and delays. The growth of these habits has reinforced the UK-India corridor’s efficiency and appeal.
The gains have policy implications in New Delhi and London. Indian officials tracking external accounts see remittances as a stabilizing force in the balance of payments, predictable and less sensitive to market swings than foreign direct investment. For that reason, some analysts argue that India should discuss banking and tax arrangements with the UK that keep transfer fees low and expand access to digital channels, so senders and recipients keep more of each pound sent. On the UK side, efforts to maintain competition among money transfer operators and banks, and to ensure transparent fee disclosures, help protect consumers and sustain the corridor’s low-cost status.
The latest country shares underscore how visible the UK’s role has become. In FY 2023-24, the US led with 27.7% of India’s total remittances, followed by the UAE at 19.2%, the UK at 10.8%, Saudi Arabia at 6.7% and Singapore at 6.6%. Those five accounted for most of India’s inflows, with the UK’s jump over the past three years making it the fastest-growing major source. The base of UK remitters is both broad and diverse: long-term residents with steady monthly transfers, students sending occasional amounts, and new professionals sending larger sums as incomes rise. That variety helps keep the corridor resilient when one group’s circumstances change.
Even the competition among remittance providers is part of the story. UK senders often see multiple offers—flat-fee transfers for small amounts, percentage fees for larger ones, and promotions that waive costs on first transfers. India’s large market for receiving funds encourages providers to keep fees tight and exchange rates close to the mid-market rate, especially for app-based transfers. With many UK-based Indians sending money to India at least once a month, even small fee differences can determine which platform wins their repeat business.
For India, the inflows do more than fill immediate needs. Remittances support small-business starts, home purchases and education plans that create longer-term income. In many states, they also fund health care, with families using regular transfers to pay private clinic fees or medication costs. The steady stream from places like the UK has a knock-on effect on local banks and microfinance firms, which see stronger deposit growth in communities with many NRI families. The reliability of those receipts makes planning easier, especially when currency markets are calm and the rupee is stable against the pound.
The UK’s rise does not mean the Gulf-to-India routes are fading away, but it does show how Indian migration patterns are changing. As more Indians enter higher-skilled roles in advanced economies, including the UK, the size and regularity of remittances can increase, and the fees are often lower thanks to digital channels. That combination is visible in the data for FY 2023-24 and the early readings from FY 2024-25. It also aligns with the view that the UK-India corridor will stay competitive on cost, given strong provider competition and heavy usage.
While the latest figures are encouraging for remitters and recipients, the corridor’s future will still depend on job markets in the UK, visa and mobility rules, and the continued availability of low-cost digital transfers. For now, bilateral ties and network effects—friends and relatives following established paths—appear to be keeping the pipeline strong. As those networks expand, remittance remains one of the most tangible links between the UK and India, with families in cities and villages across India depending on the money that arrives each month from London, Manchester, Birmingham and beyond.
For those tracking the data, central bank and international price databases provide regular updates on volumes and fees. India’s central bank publishes detailed breakdowns of sources and country shares, while remittance price trackers show the gap between digital and in-person costs and how the UK-India corridor compares with others. The trend lines point in the same direction: a larger role for the UK in India’s remittance picture, lower fees that keep more money in Indian households, and a diaspora that sends money home more often when costs are transparent and services are quick. Official remittance statistics and corridor analyses can be accessed via the Reserve Bank of India, which compiles country shares and inflow totals used widely by analysts and policymakers.
The emphasis on cost is not just technical. When fees stay at “below 3%” and exchange rates are competitive, a construction worker in Kerala can build a savings cushion faster, a student in Pune can keep up with tuition, and a family in Gujarat can meet medical bills without borrowing. The UK’s role in that chain has grown each year since 2020-21, and the latest data from 2023-24 put it beyond 10% of India’s total inflows for the first time. With the overall remittance envelope reaching about US $135.46 billion in FY 2024-25, the stakes for household budgets—and for India’s external accounts—remain high.
The coming year will test whether the UK can maintain its pace. Much will depend on how many Indian graduates stay to work in the UK after their studies, the hiring outlook in sectors that employ large numbers of Indians, and the persistence of tight margins among remittance providers. For now, the combination of a strong Indian community in the UK, steady employment, and low-cost transfers has made the UK-India remittance corridor one of the most efficient in the world.
“As Gaura Sengupta noted, the rise of the US, UK and Singapore in India’s remittance mix points to a lasting shift in who is sending money and why.”
If costs stay low and the UK remains open to Indian talent, the flow of money home to India is likely to keep growing from Britain’s streets to India’s households.
This Article in a Nutshell
The UK has rapidly increased its share of remittances to India, reaching 10.8% in FY 2023-24 from 6.8% in 2020-21. This shift stems from a growing pool of Indian students and skilled workers in the UK, stable incomes, and low-cost digital transfer channels with fees below 3%. India’s total remittances hit US $135.46 billion in FY 2024-25, supporting household needs and covering nearly 47% of the merchandise trade deficit, while highlighting a diversification away from Gulf-dominated flows.
