According to latest data by 1Lattice, the outward remittances from India has witnessed a downfall of approximately 38 per cent, month on month in October 2023. For the past 3 years, overseas travel and leisure has had the highest share in outward remittances from India.
The month of October has recorded outward remittances worth USD 2.2 billion compared to 3.5 billion in September, with travel holding the majority share of 63 per cent, followed by education of 12 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.
The remittances for the purchase of immovable property dropped by nearly 27.88 per cent to USD 11.02 million in the period under review, from USD 15.28 million in the year-ago period, and it held a market share of 1 per cent in October.
Outward remittance towards investment on debt/equity witnessed a significant decrease of about 60 per cent m-o-m, in October 2023, in comparison to an uptick of 121 per cent in September and 62 per cent in August, 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.
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.
According to data released by the Reserve Bank of India (RBI), outward remittances under the RBI’s Liberalised Remittances Scheme (LRS) fell 60.45 per cent month-on-month (M-o-M) in October to USD 2.17 billion from USD 3.50 billion in September.
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.
In the nine-month period between April and December (FY23), remittances under this scheme have touched USD 19.35 billion, which is almost equal to the total amount remitted under this scheme in the whole of FY22.
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.
