Indians spend record $31.7 billion abroad in FY24

MUMBAI: Indians spent a record $31.7 billion overseas under the liberalised remittance scheme in FY24, an increase of nearly 17% over the $27.1 billion recorded in FY23. The rise has been despite the imposition of tax collection at source. However, data analysis shows that the monthly average spending fell after the imposition of TCS in Oct 2023.
The annual data for remittances shows that Indians have taken to overseas travel with a vengeance, spending $17 billion on it in FY24 – an increase of more than 24.5% over the $13.6 billion in the previous year.The share of international travel in spending under the LRS has risen to 53.6% in FY24 from 37% in FY20 before the onset of the pandemic. In FY21, international travel spending had dipped to $3.2 billion due to restrictions on mobility.

On the other hand, the share of remittance going towards education abroad has steadily declined. In FY21, remittance for education was 30% largely because travel was subdued during the pandemic. The share fell to 26% after travel restrictions were lifted in FY22. Spending on education dipped in FY23 in absolute terms to $3.4 billion from $5.2 billion in the year before, resulting in the share of overall spend falling to 12%. In FY24, spending on studies abroad was flat at nearly $3.5 billion even as travel spending soared.
As a result of lesser spending on fees, studies abroad is no longer the second-biggest category in forex spends. Indians have spent more on maintaining relatives abroad ($4.6 billion) than on fees.