Draft Ministerial Declaration on Cross-border remittances | Current Affairs | Vision IAS
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    Draft Ministerial Declaration on Cross-border remittances

    Posted 04 Mar 2024

    Updated 27 Mar 2024

    2 min read

    • It is a joint communication from 4 countries (India, Bangladesh, Nepal & Sri Lanka) to the Committee on Trade in Financial Services (CTFS).

     

    • Key Highlights of Declaration
      • Significant socio-economic impact of remittances, especially for developing nations.
        • 78 % of remittance flows in 2023 went to Low and Middle-Income Countries.
      • Reaffirms commitment to  UN SDG Goal 10.C to,
        • reduce transaction costs of remittances to less than 3 %, and,
        • eliminate remittance corridors with costs higher than 5 % by 2030.
      • Current global average transaction costs of remittances is at 6.18 % (more than twice the SDG target).
      • Instruct the CTFS to undertake a work program consisting of efforts toward reducing the cost of remittances.

     

    • Remittances: Generally, refer to money or goods that migrants send back to families and friends in origin countries.
      • India is the world's largest recipient of remittances estimated at 125 billion USD in 2023.

     

    • Significances of Remittances for India
      • Important source of family income, increasing people's purchasing power which drives the consumption market.
      • One of the largest sources of external financing and a major contributor to forex reserves.
      • It tends to be more stable than capital flows.

     

    • Concerns: Create dependency, human cost of migrants, etc.

     

    Committee on Trade in Financial Services (CTFS)

    • It is a subsidiary body under the Council for Trade in Services (CTS) under the World Trade Organization (WTO).
      • CTS is responsible for facilitating the operation of the General Agreement on Trade in Services (GATS) and for furthering its objectives.
    • Tags :
    • WTO
    • Cross-border remittances
    • Remittances
    • WTO-CTFS
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