Remittances by Indian residents under the Reserve Bank of India's Liberalised Remittance Scheme (LRS) dropped 29% to $1.96 billion in February 2025 from $2.77 billion in January, according to RBI data.
The biggest decline was seen in remittances for travel and education. Travel-related remittances fell 33.8% to $1.09 billion, while remittances for studying abroad plunged over 50% to $182.17 million.
Experts say fewer students going abroad — especially to the US, UK, and Canada — contributed to the drop. These countries saw at least a 25% decline in Indian student permits in 2024.
Travel plans were also affected by global economic uncertainty, according to industry sources.
However, investment remittances in equity and debt rose to $173.84 million in February from $104.98 million in January.
The Union Budget 2025 raised the threshold for Tax Collected at Source (TCS) on LRS transactions from Rs 7 lakh to Rs 10 lakh. While this was expected to ease pressure on outbound travel and education, the full impact is yet to be seen.
Under LRS, resident Indians can remit up to $250,000 per financial year for purposes such as education, travel, investment, and medical treatment abroad. Outward remittances under LRS stood at $31.73 billion in FY24, with travel alone accounting for $17 billion.
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