According to latest data by 1Lattice, the outward remittances from India has witnessed an increase of approximately 3 per cent, month on month in September 2023. For the past 3 years, overseas travel and leisure has had the highest share in outward remittances from India.
The month of September has recorded outward remittances worth USD 3.5 billion, with travel holding the majority share of 51 per cent, followed by family maintenance of 16 per cent, gifts at 11 per cent, investment in equity/debt and education holding a 6 per cent share and 11 per cent share respectively, the data highlighted.
The remittances for the purchase of immovable property expanded by nearly 56.53 per cent to USD 60.31 million in the period under review from USD 38.53 million in the year-ago period.
Outward remittance towards investment on debt/equity witnessed an uptick of a whopping 121 per cent m-o-m, in September 2023, in comparison to an uptick of 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 has 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 data released by the Reserve Bank of India (RBI), outward remittances under the RBI’s Liberalised Remittances Scheme (LRS) increased by 26.09 per cent to USD 9.23 billion in the second quarter (Q2) of 2023-24 (FY24) from USD 7.32 billion in Q2 of 2022-23 (FY23).
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.
