India spends 3 & half times more on foreign travel than 5 yrs ago: RBI

Indians are spending roughly three and a half times more on travelling abroad than five years ago, data released by the Reserve Bank of India (RBI) shows. With a steady rise in the trend of exploring foreign lands, travel generated 53.6 per cent of the country’s remittance outflow in the fiscal year 2023-’24, or FY24. The numbers are up from 1.5 per cent in 2013-14 and 35 per cent in 2018-19.

On an average, outward foreign exchange remittances drawn per month by resident Indians has surged to $1.42 billion in FY24. The amount is up from $400 million in FY19, according to the RBI.

The data shows Indians drew $17 billion in FY24 for foreign travel under the RBI’s Liberalised Remittances Scheme, or LRS, which lets all resident individuals including minors to remit up to $2,50,000 in a fiscal year for permissible current and/or capital account transactions. The amount marks a 24.4 per cent surge, up from $13.66 billion in the year before.

The rise in overseas travel is widely being attributed to certain key factors such as growing lifestyle ambitions, increase in disposable income among the middle class, and the fact that Covid-19 travel sanctions have now been lifted, according to media reports.

Along with the rising trend of overseas travel is the fact that Indians have increasingly started to invest more in foreign lands, the RBI data shows. In FY24, resident Indians made overseas investments worth $100 million on an average every month, mainly in foreign equity and debt. Remittances in FY234 for the maintenance of close relatives who were settled abroad amounted to $4.61 billion while the total amount remitted for the purpose of ‘studies abroad’ was $3.47 billion.

India’s combined outward remittances as part of LRS in FY24 was $31.73 billion, compared to $27.14 billion in FY23, up by 16.91 per cent. The amount of remittances under LRS was $13.73 billion in FY19.