Outward remittances under LRS drop 14.88% in H1FY25, shows RBI data

The remittances for maintenance of close relatives fell by 37.17 per cent Year-on-Year (YoY) to $1.92 billion as compared to $3.05 billion

Outward remittances under the Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI) fell by 14.88 per cent year-on-year (Y-o-Y) during the April–September period of FY25 (H1 FY25), driven by declines across major segments.

 

According to data released in the RBI’s monthly bulletin for September, outward remittances under LRS stood at $15.61 billion in H1 FY25, down from $18.34 billion in H1 FY24.

 

Remittances for the maintenance of close relatives dropped sharply by 37.17 per cent Y-o-Y to $1.92 billion from $3.05 billion. Funds allocated for overseas education also declined by 12.83 per cent Y-o-Y to $1.60 billion, compared to $1.84 billion in the year-ago period.

 

Minor dip in international travel remittances  International travel, which accounts for nearly 57 per cent of total outward remittances under LRS, saw a marginal decline of about 1 per cent Y-o-Y to $9.20 billion in H1 FY25, compared to $9.30 billion in H1 FY24.

 

Remittances for the purchase of immovable property fell by 9.38 per cent to $136 million from $150 million, while investments in equity and debt markets dropped by 19.09 per cent Y-o-Y to $699.26 million from $864.32 million.

 

Significant decline in gifts and deposits

  The ‘Gift’ segment saw a substantial drop of 31 per cent Y-o-Y to $15.53 billion from $22.61 billion. Meanwhile, remittances under the ‘Deposits’ segment declined by 55 per cent Y-o-Y to $294.9 million from $660 million.

 

For September 2024, outward remittances stood at $2.76 billion, compared to $3.50 billion in September 2023. Notably, funds for the maintenance of close relatives and deposits experienced steep declines.

 

Remittances for the maintenance of close relatives dropped by nearly 50 per cent to $281.24 million in September 2024 from $989.89 million in September 2023, while the ‘Gift’ segment fell by 63.73 per cent to $43 million from $118.56 million.

 

About the LRS scheme

  The LRS, introduced in 2004, allows resident individuals, including minors, to remit up to $250,000 per financial year for permissible current or capital account transactions, or a combination of both. Initially launched with a limit of $25,000, the cap has been revised periodically to align with macroeconomic and microeconomic conditions.