homeeconomy NewsIndia expects WTO Ministerial's outcome document to cut cost of cross border remittances
India expects WTO Ministerial's outcome document to cut cost of cross-border remittances
With overwhelming support on the issue of cheaper remittances by LDCs and developing countries, government sources told CNBC-TV18 that India is hopeful of seeing some positive development on the issue in the WTO outcome document.
Remitting money from developed countries to developing and lesser developed countries (LDCs) may get cheaper if the proposal by India and many other developing countries on remittances is accepted at the 13th WTO Ministerial Conference in Abu Dhabi.
With overwhelming support on the issue of cheaper remittances by LDCs and developing countries, government sources told CNBC-TV18 that India is hopeful of seeing some positive development on the issue in the WTO outcome document. The final scheduled day of the WTO Ministerial is on February 29.
In its draft ministerial declaration, India's submission on cross-border remittances has outlined the socio-economic need for such a move, pointing out that 78% of the total amount in remittances in 2023 went to low and middle-income countries. India's proposal aims to reduce the cost of remittances from the current 6.18% to less than 3%, in line with the United Nations' Sustainable Development Goals (SDGs) target.
However, government sources pointed out that the European Union (EU) has given an alternative proposal on financial inclusion, which may dilute any reform in the area of cross-border remittances.
Stating that the EU's proposal aims to tax remittances to LDCs and developing countries and benefit financial institutions in the developed world, sources added that development-related paragraphs are also being blocked by the EU in the name of non-trade issues like labour laws and women's participation.
As per a World Bank report, India was the highest recipient of inflows of overseas remittances in 2023 worth $125 billion, with the cost of remittances ranging between $7 billion to $8 billion.
A WTO outcome on the issue can reduce the cost and speed of overseas remittances for all developing and less developed countries. India also feels that it is unlikely that there will be any outcome on any alternative dispute settlement mechanism, as the country blocking proposals to resolve the issue, the United States, is going to polls in November this year.
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