India’s proposal on reducing cost of cross-border remittances placed before the WTO has received support from countries such as Morocco and Vietnam, who find the matter of utmost importance, but not all members are on board yet and more outreach was needed, WTO Deputy Director General Xiangchen Zhang has said.
“If we want to make progress, we need to increase awareness of the issue. We need to do more outreach to get all the relevant people on board,” Zhang told businessline.
It was important to work with other international organisations, such as the International Labour Organisations (ILO) and the International Organisation for Migration and also financial institutions like World Bank and central banks of member countries, Zhang said.
These institutions can come up with concrete proposals to move the issue forward.
India, with cross-border remittances as high as $120 billion in 2023, submitted its proposal for lowering costs at the WTO’s 13th Ministerial Conference in Abu Dhabi early this year.
It followed it up with a proposal that a work programme be initiated to make recommendations, but it did not find support from countries such as the US, sources have said.
In March this year, the National Payments Corporation of India made a presentation for a session on ‘cost of remittances’ at the WTO’s Committee on Trade in Financial Services drawing from its experience of putting in place a robust physical as well as electronic payment and settlements systems in the country.
Efforts are on at various levels to push the initiative, Zhang said.
Initial stage
At the ongoing WTO Public Forum in Geneva, a panel discussion on reducing remittances cost was organised by Morocco on Wednesday, which included participants from the UN, WTO, World Bank and the country’s central bank.
The recommendations made by the panel can be submitted to the WTO Committee on Trade in Financial Services in the next meeting to deepen the debate, the DDG added.
“The proposal for cutting costs is still at the initial stage. Not all are on the same page…But it is a good start. There can be no short cut,” he said.
In its draft proposal at MC13, India pointed out that the global average cost for sending remittances remained high at 6.18 per cent—more than twice the SDG target.
“We highlight that one of the means to achieve cheaper, faster and more transparent and accessible cross-border payments including remittances is promoting interoperability and interlinkages of digital payment infrastructures including fast payment systems. The global average cost for digital remittances at 4.84 per cent is significantly lower than the cost for non-digital remittances,” India’s representation stated.
The reporter is in Geneva at the invitation of the WTO