According to latest data from 1Lattice, the outward remittances from India witnessed an increase of about 3 percent, month on month in September 2023. During the past 3 years, foreign travel and leisure had the highest share in outward remittances from India.
The month of September recorded outward remittances worth USD 3.5 billion, with travel holding the majority share of 51 percent, followed by family maintenance at 16 percent, gifts at 11 percent, equity/debt investment and education holding 6 each. cent share and 11 percent share respectively, the data highlighted.
Remittances for the purchase of real estate increased by nearly 56.53 percent to USD 60.31 million in the period under review from USD 38.53 million in the year-ago period.
Outward remittance to investment in debt/equity witnessed an increase of a whopping 121 percent mom, in September 2023, compared to an increase of 62 percent in August 2023. After international travel, Indians spent the most on foreign education, followed by maintenance of close relatives, and gifts.
The Indian government recently raised the tax collection rate at source (TCS) on foreign remittances under the Liberalized Remittance System (LRS) from 5 percent to 20 percent, effective from October 1, 2023.
According to data released by the Reserve Bank of India (RBI), outward remittances under the RBI’s Liberalized Remittance Scheme (LRS) increased by 26.09 percent to USD 9.23 billion in the second quarter (Q2) of 2023-24. (FY24) of USD. 7.32 billion in Q2 of 2022-23 (FY23).
The LRS allows resident Indians to transfer funds abroad without restrictions, up to a specified limit. This monthly drop was due to a decrease in funds sent for the maintenance of close relatives.
In the nine-month period between April and December (FY23), remittances under this scheme touched USD 19.35 billion, which is almost equal to the total amount remitted under this scheme in the whole of FY22.
External remittances recorded in FY20 were USD 18 billion, in FY21 it was USD 12 billion and in FY22 it was a whopping USD 19 billion. In January and February 2023, the numbers recorded were USD 2.7 billion and USD 2.1 billion, 1Lattice data said.