Indian residents set a new record by spending $31.7 billion overseas under the Liberalised Remittance Scheme (LRS) in FY24, marking a nearly 17% increase from the $27.1 billion spent in FY23. This rise occurred despite the introduction of tax collection at source (TCS). However, data analysis reveals that monthly average spending declined post-TCS introduction in October 2023.
The annual remittance data highlights a significant surge in overseas travel spending, which reached $17 billion in FY24—a more than 24.5% increase from the $13.6 billion recorded the previous year.
The portion of LRS spending allocated to international travel jumped to 53.6% in FY24, up from 37% in FY20 before the pandemic. Travel expenditure had plunged to $3.2 billion in FY21 due to mobility restrictions.
Conversely, the share of remittances directed towards education abroad has been declining. In FY21, education remittances comprised 30% of the total, primarily due to subdued travel during the pandemic. This share dropped to 26% in FY22 following the lifting of travel restrictions. Spending on education fell in absolute terms to $3.4 billion in FY23 from $5.2 billion the previous year, reducing its share of total spend to 12%. In FY24, spending on education remained flat at nearly $3.5 billion, even as travel expenses soared.
Consequently, education is no longer the second-largest category of forex spending. Indians have spent more on maintaining relatives abroad ($4.6 billion) than on educational fees.
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