Indians paid more forex fees than any other country in 2020

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Indians paid Rs 26,300 crore as foreign exchange fees in 2020 while sending money to other countries, a report said on Thursday. Out of this, Rs 9,700 crore was hidden as exchange rate mark-ups alone, the report added. The exchange fee in 2016 was Rs 18,700 crore, which was Rs 7,600 lower compared to 2021. However, in the past five years the overall amount Indians have spent on transaction fees for sending money have decreased in the last five years. The fees paid to exchange rate margins are growing.

Transaction costs at Rs 14,000 cr in 2020

An official statement said that a lack of transparency in remittance fee structures had put consumers at risk of hidden fees as they pay more than what is advertised unknowingly for the remittance service in the form of a marked up exchange rate.

It further said that the Indian diaspora which is the largest remitter were not spared. In the last five years, money lost to exchange rate margins on inward remittances has increased from Rs 4,200 crore to Rs 7,900 crore.

Fees paid to transaction costs have increased to Rs 14,000 crore in 2020 from Rs 10,200 crore in 2016. A significant chunk of these fees paid on remittances to India come from people in gulf countries where most people are employed in blue-collared jobs to support families back home in India, the report said.

Out of the share of total fees paid on inward remittances to India in 2020, Saudi Arabia ranked first at 24%, followed by the United States of America (18%), United Kingdom (15%), Qatar (8%), Canada (6%), Oman (5%), United Arab Emirates (5%), Kuwait (5%) and Australia (4%).