WTO backs India's proposal to cut remittance cost: Developing countries to benefit most; vantage for UPI, say economists
The Economic Times. Except the US, most WTO members have backed India's proposal. A cost reduction can not only increase the inflow of remittance to developing countries like India, but also create vantage for the country's Unified Payments Interface (UPI) for global penetration, economists told Livemint, while speaking on its impact on the Indian economy.
India submitted a draft Ministerial Declaration during the ongoing 13th WTO ministerial conference in Abu Dhabi. India emphasised the need to lower the costs associated with cross-border remittances. The declaration underscored the significant socioeconomic impact of remittances, especially for developing nations, noting that a staggering 78 per cent of total remittance flows in 2023 went to Low and Middle-Income Countries (LMICs), according to the proposal reviewed by Livemint.
“We reaffirm our commitment to the UN SDG Goal 10.c to reduce to less than 3 per cent the transaction costs of remittances and eliminate remittance corridors with costs higher than 5 per cent by 2030 with a view to achieving the primary goal target, that is, 'reduce inequality within and among countries' which is aligned to the WTO's development agenda," the draft proposed. The draft highlighted the disparity between current global remittance costs (6.18 per cent) and the UN Sustainable Development Goal (SDG) target of less than 3 per cent. It also showed the connection of cross-border payments with broader financial inclusion efforts.
“The majority of transfers are done by people from poor countries working in developed nations. The remittance cost is paid by these people working abroad to transfer their own money. The moment we have developed a countries-centric policy, benefits will shift,"
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