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Indians, it appears, are travelling overseas with a vengeance. Or, that is what the data on outward remittances put out by the Reserve Bank of India (RBI) suggests.
As per the Central bank’s latest data, Indians have spent $3.9 billion on international travel in the first four months of FY23 under RBI’s Liberalised Remittance Scheme (LRS). The remittances for travel between April and July accounts for nearly 57 percent of what Indians spent on international travel in the entire FY22.
In the previous fiscal, Indians spent $6.91 billion on overseas travel, which in itself is the second highest remittances in a single year. The previous year’s high spending was driven by pent-up travel demand caused by Covid-19, which stalled international travel for nearly two years. Prior to that, the highest travel remittance was recorded in FY20, when Indians spent $6.96 billion on international travel.
In FY23, Indians spent $881 million on overseas travel in April, followed by $995 million (May), $1.04 billion (June) and $1.02 billion in July. The outward travel remittance in the first four months has even exceeded $3.24 billion that Indians spent on travel in the whole of FY20. However, FY20 was an aberration as the pandemic and consequent lockdowns and international travel restrictions had brought outbound travel to a standstill.
With opening up of borders and resumption of international flight services, outbound travel picked up from the mid of FY22, pushing the total outward remittance of Indians to a historic high of $19.61 billion.
Under LRS, resident individuals are allowed to remit up to $250,000 per financial year for permissible current or capital account transactions, including remittances for overseas education, international travel, maintenance of close relatives, medical treatment, purchase of immovable properties and investment in equity/debt, gift or donation, among others.
In the first four months of FY23, Indians have remitted a total of $8.03 billion under LRS, out of which travel remittances alone accounted for 49 per cent, followed by remittances for ‘maintenance of close relatives’ (16 per cent), overseas education (12.6 per cent), and gifts (12.3 per cent).
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