Indians Now Spend 3.5 Times More on Foreign Travel Compared to Five Years Ago

Indians Now Spend 3.5 Times More on Foreign Travel Compared to Five Years Ago

Indians Now Spend 3.5 Times More on Foreign Travel Compared to Five Years Ago

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According to data from the Reserve Bank of India (RBI), Indians spent a total of $17 billion (Rs 1,41,800 crore) on overseas travel in the fiscal year 2023-24 under the RBI’s Liberalised Remittances Scheme (LRS). This marks a 24.4% increase from the $13.66 billion spent in the previous year.

The surge in overseas travel expenditures highlights a significant shift in spending habits, with monthly outward foreign exchange remittances averaging nearly $1.42 billion (around Rs 12,500 crore) in 2023-24. This is a stark rise compared to the average of $400 million (about Rs 3,300 crore) per month five years ago in 2018-19.

Travel has now become the largest category of remittance outflow from India, making up 53.6% of total outflows in FY24. This is a significant jump from a mere 1.5% share in 2013-14 and 35% in 2018-19.

The increase in foreign travel is driven by higher disposable incomes and the growth of the aspirational middle class. The trend has accelerated further following the lifting of travel restrictions imposed during the Covid-19 pandemic. A report by Bank of Baroda noted that while the share of remittances for maintaining close relatives abroad has remained steady at around 15% over the past decade, there has been a notable decline in the shares of remittances for gifts and education.

Indians are also increasingly investing abroad. In 2023-24, residents invested an average of $100 million abroad each month, totaling $1.51 billion for the year, compared to $1.25 billion in 2022-23. Remittances for ‘maintenance of close relatives abroad’ totaled $4.61 billion, while ‘studies abroad’ accounted for $3.47 billion in 2023-24.

Overall, total outward remittances under LRS reached $31.73 billion in 2023-24, up 16.91% from $27.14 billion in the previous year. Five years ago, in 2018-19, total outward remittances under LRS were $13.73 billion.

Under the LRS, all resident individuals, including minors, can remit up to $250,000 (approximately Rs 2.08 crore) abroad per year without prior approval from the RBI.