Why is money pouring into India due to the outbreak of Gulf War? Know the truth, you will be blown away!

New Delhi: The ongoing Israel-America-Iran war in the Gulf region has attracted the attention of the entire world. This war is having a double impact on India. On one hand the prices of crude oil are increasing, on the other hand the future of Indian laborers working abroad has become uncertain.

Remittances from Gulf: India’s big lifeline

India is the world’s largest remittance receiving country. In the financial year 2024-25, Indians sent a record 135.4 billion dollars home from abroad. Of this, about 38% i.e. $51 billion comes only from Gulf countries like UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain. According to the Ministry of External Affairs, about 88.8 lakh Indians are working in these six countries.

Most of them are semi-skilled or unskilled labourers, who do jobs like construction, taxi driving and cleaning. Lakhs of families depend on the money sent by them. This money helps in paying school fees, repaying loans and building houses in states like Kerala, Tamil Nadu and Uttar Pradesh.

Why is more money coming now?

After the start of the war, an increase of 20-30% has been seen in the money coming into India from Gulf countries, but this is not good news. Workers are sending more money out of fear because they feel that they may lose their jobs or the situation may worsen due to the war. This increase is just a precaution, which will not last long.

A long war will worsen the situation

If the war ends in a few weeks then the damage will be less, but if it continues for several months the situation will become serious. Construction work may stop, companies may fire workers and Gulf governments may take strict action against foreign workers. By the end of March, more than 2.2 lakh Indians had returned from the Gulf. This number may increase further in a long war.

What will be the impact on the economy?

Remittances coming from the Gulf help a lot in reducing India’s current account deficit. Import bill is increasing due to oil becoming expensive. Earlier the price of crude oil was 72 dollars per barrel, now it has crossed 100 dollars.

If remittances decrease and oil remains expensive, pressure on the rupee will increase and the economy may suffer a shock. Poor families will be most affected because they have no other source of income.