India has emerged as the highest remittance receiving country in the world at $15,174 million during 2002-03, reflecting its comparative advantage in skilled and semi-skilled labour exports.
"Emergence of workers' remittances as an important source of external finance, offsetting high trade account deficits and volatility in the capital account is another important development in the current account," the Reserve Bank of India said in its `Report on currency and finance', released in Mumbai on Wednesday.
Almost 51.1 per cent of total remittances came from the United States, while Europe and Asia accounted for 25.8 per cent and 22 per cent respectively, it said.
There has been a structural shift in regional sources of remittance flow to India during 1990s, responding to the changing pattern of demand from predominantly unskilled or semi-skilled labour to highly skilled, it said.
As the oil boom in the Middle East countries slowed down, the contribution of the region attracting unskilled or semi-skilled labour has significantly come down between 1997-98 and 2002-03.
"However, the slow down in such remittance inflows has not impacted on aggregate remittance inflows to India, which are sustained by higher inflows from America and Europe," the report pointed out.
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