Overview of India's Outward Remittances
India's outward remittances under the Liberalised Remittance Scheme (LRS) saw a 6.85% year-on-year (YoY) decrease to $29.56 billion in FY25 from an all-time high of $31.73 billion in FY24. This decline was due to global uncertainty, muted domestic income growth, and high base effects.
Monthly and Segment-wise Breakdown
- In March 2025, outward remittances rose by 10.65% YoY to $2.55 billion, mainly due to international travel which increased by 12.3% YoY to $1.12 billion.
- While most LRS components posted growth, remittances for studies abroad and medical treatment declined by 18.77% and 56.30% YoY, respectively.
LRS Details and Historical Perspective
The Liberalised Remittance Scheme was introduced in 2004, initially allowing resident individuals to remit up to $25,000 per financial year. This limit has since increased to $250,000.
Impact of Economic Factors
- International travel, accounting for nearly 60% of LRS, dipped slightly by 0.25% YoY to $16.96 billion.
- Funds for maintenance of relatives and overseas education declined by 19.28% and 16.09% YoY, respectively.
- Domestic factors like weak consumption, income growth, and US election uncertainties affected remittance flows.
Trends in Overseas Education and Currency Impact
- Decreased interest among Indian students in US, Canada, and UK institutions contributed to reduced education-related remittances. Countries like Australia and New Zealand, with more affordable education, saw increased interest.
- The Indian rupee's 2.4% depreciation in FY25 affected funds for relative maintenance and led to a 17.9% YoY decline in remittances under the gift component to $2.9 billion.
Sectoral Growth in LRS Remittances
- Remittances in equity and debt investments increased by 12.45% YoY to $1.69 billion.
- Purchase of immovable property abroad rose by 33.11% YoY to $0.32 billion.
