Indian residents sent nearly $2.8 billion overseas in September 2024, marking the highest outflow in 13 months under the Reserve Bank of India's Liberalised Remittance Scheme (LRS). This represents a nearly 1% increase compared to the $2.76 billion recorded in September 2023 and a 5% jump from the $2.6 billion remitted in August 2024.
Travel Dominates Foreign Exchange Spending
International travel continues to be the primary driver of foreign exchange outflows from India. Despite a 2.8% decline from the previous year, travel spending accounted for $1.7 billion in September alone. The share of travel in total outward remittances has reached 58%, a significant increase from just 14% a decade ago.
This trend highlights how international travel by resident Indians has become the main channel for spending foreign exchange. The category first crossed the 50% threshold in FY23 and has maintained its dominant position since then.
Shifting Patterns in Education and Family Support
While travel spending surged, other traditional categories showed notable declines. Remittances for education abroad dropped 17.4% to $264 million in September, reversing the surge seen in August when students were preparing for the autumn semester.
Money sent for maintaining close relatives also softened during this period. These changes reflect longer-term shifts in spending patterns. Education-related transfers, which peaked at 30% of total outflows in FY21 when overall flows were depressed, have since slipped below 10%.
Similarly, support for relatives, which constituted nearly 30% of outward flows in FY16, now represents approximately 12-15% of the total, even though absolute amounts have gradually increased over time.
Investment Flows Show Mixed Trends
The most dramatic change in September came from overseas investments in equity and debt. These transfers more than doubled to $279 million compared to previous months. Banking institutions report a steady increase in individual willingness to invest in global markets, facilitated by the proliferation of Exchange Traded Funds (ETFs) and the attraction of technology stocks.
However, the broader narrative for this category remains one of relative decline. The share of investments in total outward remittances has fallen from almost 24% in FY12 to just 5-7% in recent years. This decline is partly attributed to regulatory limits on offshore exposure through mutual funds.
On a fiscal year-to-date basis, outward remittances show a downward trend. The total for April-September 2025 stood at $14.8 billion, compared to $15.6 billion during the same period in 2024. Under the LRS framework, resident individuals can remit up to $250,000 per financial year for permitted current or capital account transactions.
