The outward remittances from India has witnessed an uptick of approximately 28 per cent, month on month in December 2023. For the past 3 years, overseas travel and leisure has had the highest share in outward remittances from India, data released by 1Lattice said on Thursday
The month of December has recorded outward remittances worth USD 2.4 billion compared to USD 1.9 billion in November and USD 2.2 billion in October, with travel holding the majority share of 64 per cent, followed by education of 11 per cent, family maintenance of 9 per cent, gifts of 8 per cent and investment in equity/debt holding a 4 per cent share, the data highlighted.
During December, the amount spent by Indians on traveling to foreign destinations stood at USD 1.54 billion. Indians spent USD 267.56 million on education abroad in the reporting month.
Forex remittances had averaged over USD 3 billion a month between April-Sept 2023 before the increased tax collection at source (TCS) came into effect in October.
Outward remittance towards investment on debt/equity witnessed a significant increase of about 146 per cent m-o-m, in December 2023, in comparison 51 per cent degrowth in November, 2023. After international travel, Indians spent most on overseas education, followed by maintenance of close relatives, and gifts.
The Indian government had recently raised the tax collection at source (TCS) rate on foreign remittances under the Liberalised Remittance Scheme (LRS) from 5 percent to 20 percent, which has been effective since October 1, 2023.
According to latest data by the Reserve Bank of India, the amount remitted under LRS stood at USD 24.80 billion in the 9-month period ended in December 2023, compared to USD 20.63 billion in the same period last year.
In the first half of FY24, money sent abroad by Indians under the Liberalised Remittance Scheme (LRS) hit a record high of USD 18.34 billion. The introduction of the TCS saw remittances drop sharply from nearly USD 3.5 billion in Sept to about USD 2.2 billion in a month’s time.
The LRS allows resident Indians to transfer funds abroad without restrictions, up to a specified limit. This month-on-month fall was due to a decline in funds sent for maintenance of close relatives.
The Liberalised Remittance Scheme (LRS) allows every Indian to send up to USD 250,000 abroad annually.
Outward remittances recorded in FY20 was USD 18 billion, in FY21 it was USD 12 billion and in FY22 it was a whopping USD 19 billion. In January and February 2023, the numbers recorded were USD 2.7 billion and USD 2.1 billion, said the 1Lattice data.
ETBFSI now has its WhatsApp channel. Join for all the latest updates.
