Daijiworld Media Network- Mumbai

Mumbai, Jun 26: Indians' appetite for overseas spending continues to grow, with foreign outflows rising 8.5% year-on-year to nearly $2.5 billion in April 2025, up from $2.3 billion in April 2024, as per latest data released under the Reserve Bank of India's Liberalised Remittance Scheme (LRS).

Travel-related expenses remained the top contributor, accounting for 51.2% of the total spending—up from 50.1% a year earlier—signalling a strong revival in international tourism among Indian citizens. Notably, travel spending had peaked at a record 63% in August 2024, before cooling off slightly in subsequent months.

Another striking trend was the near-doubling of financial investments overseas, including equity and debt instruments. This category now forms 8.2% of the total outflows, up significantly from 4.3%, reflecting growing interest among Indian investors in global markets.

Real estate spending abroad also gained traction, with the share of funds directed toward property purchases rising from 1% to 1.8%, indicating renewed interest in offshore assets, particularly in destinations like Dubai, London, and parts of Southeast Asia.

Meanwhile, deposits in foreign accounts saw a moderate rise, increasing to 3.8% from 3.2%, suggesting a mild uptick in overseas savings.

However, not all categories experienced growth. Gift transfers saw a decline, with their share falling to 11.7% from 13.6%. Similarly, remittances towards maintenance of close relatives dipped to 16% from 17.2%.

One of the most notable drops was seen in education-related remittances, which plunged to 6.6% from 9.1%, likely influenced by recent immigration restrictions in key destinations like the US. Also, spending on medical treatment abroad halved, dropping sharply to 0.2% of total outflows.

Experts say the relative strength of the Indian rupee in April may have influenced remittance behavior. “A stronger rupee often prompts individuals to delay large foreign transfers, anticipating better exchange rates in future,” noted a forex analyst.

Under the RBI’s LRS framework, Indian residents are allowed to remit or spend up to $250,000 annually abroad for permitted current and capital account transactions.