UPSC Prelims Practice Questions — INDIA REMAINS AS THE WORLD’S LARGEST RECIPIENT OF REMITTANCES, WITH INFLOWS REACHING USD 135.4 BILLION IN FY25

Q1. The finding that India retained its position as the world's largest recipient of inward remittances with USD 135.4 billion in FY25 was officially highlighted in which one of the following?

  • A. Economic Survey 2025-26 tabled in Parliament
  • B. Union Budget 2026-27 Annual Financial Statement
  • C. RBI's Monetary Policy Report, April 2026
  • D. NITI Aayog's Trade and Investment Review 2026

Q2. In the context of the RBI's Remittances Survey, the 'source country' of an inward remittance to India is best defined as which one of the following?

  • A. The country in which the overseas Indian earning and sending the money is resident/employed
  • B. The country of birth or origin of the migrant, irrespective of where they currently work
  • C. The country in which the recipient's bank branch in India is exclusively located
  • D. The country whose currency is used solely for denominating the transfer

Q3. With reference to how the composition of India's remittance source countries in the RBI's 2023-24 survey differs from the earlier (2016-17) pattern, consider the following statements. Which of the statements given above is/are correct?

  1. 1. The United States was the single largest source of remittances to India, ahead of the UAE.
  2. 2. Advanced economies collectively surpassed the Gulf Cooperation Council countries as the source of the majority of India's remittances.
  3. 3. The United Kingdom's share of India's remittances fell sharply between 2016-17 and 2023-24.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. The periodic Remittances Survey that ranks Indian states (such as Maharashtra, Kerala and Tamil Nadu) by their share of inward remittances is conducted by which one of the following?

  • A. Reserve Bank of India
  • B. Ministry of External Affairs
  • C. Ministry of Statistics and Programme Implementation
  • D. NITI Aayog

Q5. The RBI's Remittances Survey, which yields the state-wise distribution of inflows, captures data through 'Authorised Dealer' banks. In this context, an Authorised Dealer is best described as which one of the following?

  • A. An entity authorised by the RBI under FEMA to deal in foreign exchange
  • B. Any scheduled commercial bank permitted to accept demand deposits
  • C. A non-banking financial company licensed to accept public deposits
  • D. A bank empowered by SEBI to settle cross-border securities trades

Q6. The Rupee Drawing Arrangement (RDA) and the Money Transfer Service Scheme (MTSS), the principal channels for routing inward remittances into India, are regulated by which one of the following?

  • A. Reserve Bank of India under the Foreign Exchange Management Act, 1999
  • B. Reserve Bank of India under the Payment and Settlement Systems Act, 2007
  • C. Securities and Exchange Board of India under the Foreign Exchange Management Act, 1999
  • D. Ministry of Finance under the Prevention of Money Laundering Act, 2002

Q7. With reference to the channel and banking mix through which inward remittances were received in the RBI's latest survey, consider the following statements. Which of the statements given above is/are correct?

  1. 1. Private sector banks handled a larger share of inward remittances than public sector banks.
  2. 2. Foreign banks accounted for a larger share of inward remittances than public sector banks.
  3. 3. Digital modes accounted for over 70% of the total number of remittance transactions.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. With reference to the treatment of remittances in India's Balance of Payments, consider the following statements. Which of the statements given above is/are correct?

  1. 1. Remittances are recorded under the secondary income account within the current account.
  2. 2. Remittances contribute over 10% to India's total current account receipts.
  3. 3. Remittances are classified under the capital account because they are transfers by non-residents.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q9. Inward remittances constitute the single largest constituent of which one of the following components of India's Balance of Payments?

  • A. Secondary income (current transfers)
  • B. Primary income
  • C. Capital account
  • D. Financial account

Q10. With reference to the historical trajectory of India's leadership in global remittances, consider the following statements. Which of the statements given above is/are correctly identified?

  1. 1. India became the world's largest recipient of remittances in 2008, overtaking China.
  2. 2. FY22 inflows of about USD 89.1 billion were, at that time, a record high for India.
  3. 3. A major driver of the recent surge has been the shift towards skilled migration to advanced economies.
  4. 4. India first crossed the USD 135 billion mark in annual remittances in FY22.
  • A. 1, 2 and 3
  • B. 1, 2 and 4
  • C. 2, 3 and 4
  • D. 1, 3 and 4

Q11. As per the Economic Survey 2025-26, India's foreign exchange reserves of USD 701.4 billion (as of 16 January 2026) provided an import cover of approximately how many months?

  • A. Around 11 months
  • B. Around 6 months
  • C. Around 8 months
  • D. Around 14 months