Indian overseas spending hits all-time high of $31.7 billion in FY24

In an age defined by unprecedented global connectivity, Indians are exploring distant shores like never before. Indian globetrotters set a new milestone in the financial year 2023-2024 (FY24) by spending $31.7 billion abroad through the liberalised remittance scheme (LRS), marking a 17 per cent surge from the $27.1 billion spent in FY23.

This increase in spending persisted despite the implementation of measures such as tax collection at the source, aimed at curbing overseas expenditure, according to a report by The Times of India (TOI).

However, data showed a decline in the monthly average expenditure following the enforcement of Tax Collection at Source (TCS) in October 2023.

The yearly remittance data shows a robust inclination among Indians towards international travel, with expenditures totalling $17 billion in FY24. This marks a notable surge of over 24.5 per cent, compared to the $13.6 billion spent in the previous year, the report stated.

International travel spending

In FY24, the proportion of spending allocated to international travel within the LRS has increased to 53.6 per cent, up from 37 per cent in FY20 before the emergence of Covid-19 pandemic. However, in FY21, expenditures on international travel plummeted to $3.2 billion owing to mobility constraints.

On the other hand, the portion of remittance allocated to overseas education has exhibited a consistent decline. In FY21, education-related remittance stood at 30 per cent, primarily influenced by less travel amid the pandemic. Following the easing of travel restrictions in FY22, this percentage dropped to 26 per cent. There was a decline in absolute spending on education in FY23, plummeting to $3.4 billion from the previous year’s $5.2 billion, consequently reducing the overall share of expenditure to 12 per cent, the report stated.

Overseas education spending

Despite a surge in travel spending, the allocation towards overseas education remained stagnant in FY24, standing at around $3.5 billion.

According to the report, due to reduced expenditure on fees, studying abroad has lost its position as the second-largest category in foreign exchange spending. Indians have allocated a larger amount towards supporting relatives abroad, totalling $4.6 billion, surpassing the expenditure on fees.