- Middle East tensions threaten India's vital remittance inflows from Gulf workers
- Gulf region hosts over 90 lakh Indian workers, sends 38% of India's remittances
- Job losses or delays could cause worker return, impacting states like Kerala and Bihar
Middle East tensions are raising concerns over a potential disruption to India's crucial remittance inflows, with policymakers closely monitoring the situation as risks to jobs and worker mobility in the Gulf mount, sources told NDTV Profit. The Gulf region — comprising Bahrain, Kuwait, the UAE, Saudi Arabia, Qatar and Oman — hosts over 90 lakh Indian workers and accounts for nearly 38% of India's total remittances.
India, the world's largest recipient of remittances, received an estimated $135.4 billion in 2025, making these inflows a critical pillar of household incomes and external stability.
US President Donald Trump said he was holding off on his threatened attacks on Iranian bridges, power plants and other civilian targets, subject to Tehran agreeing to a two-week ceasefire and reopening of the Strait of Hormuz, the waterway through which a fifth of the world's oil is shipped during peacetime. Israeli Prime Minister Benjamin Netanyahu's office said it supports the United States' decision to pause military strikes on Iran, while clarifying that the two‑week truce does not apply to Israel's ongoing operations in Lebanon.
In a post on X on Wednesday, Netanyahu stated that Israel stands behind US President Donald Trump's efforts to ensure that Iran no longer represents a nuclear, missile or terror threat to the United States, Israel, Iran's Arab neighbours or the wider international community.
ALSO READ: Big Day For World Peace, Says Trump After Ceasefire Announcement
Sources also told us that prolonged conflict in the region, particularly if it disrupts crude and gas infrastructure, could trigger economic slowdown in Gulf economies, directly impacting employment. Sectors such as construction and services—key employers of Indian workers—are especially vulnerable.
Any large-scale job losses or wage cuts could lead to a reverse migration of workers back to India, disrupting the steady flow of money sent home. Even temporary interruptions in employment could delay remittances, affecting consumption in migrant-dependent households.
The impact is likely to be uneven across India, with states such as Kerala, Uttar Pradesh and Bihar particularly exposed due to their high dependence on Gulf remittances. A slowdown in inflows could ripple through local economies, hitting spending and savings patterns. Beyond households, the macroeconomic impact could be significant. A dip in remittances may pressure the rupee and widen the current account deficit, reducing a key buffer for India's external finances.
Sources said that authorities are already on high alert, tracking the movement of Indian workers in the Gulf and monitoring any signs of return migration. Officials are also keeping tabs on domestic migrant flows, with station-level monitoring at key railway hubs to detect any unusual influx.
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