According to latest data by 1Lattice (Prev. PGA Labs), the outward remittances from India has witnessed a decline of approximately 4.2 per cent, m-o-m in July 2023. For the past 3 years, overseas travel and leisure has had the highest share in outward remittances from India.
The month of July has recorded outward remittances worth USD 2.4 billion, with travel holding the majority share of 60 per cent, followed by family maintenance of 12 per cent, gifts at 10 per cent, investment in equity/debt and education holding a 2 per cent share and 11 per cent share respectively, the data highlighted.
Outward remittance towards investment on debt/equity witnessed a downfall of about 85 per cent m-o-m, in July 2023, in comparison to uptick of 195 per cent in June, 2023.
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) declined by 39.36 per cent in July 2023 compared to the previous month. Outward remittances under the LRS scheme were USD 2.36 billion during the month as compared to USD 3.89 billion in June.
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.
