Indian Overseas Spending Reaches Record $31.7 Billion In FY24: Report

Indian Overseas Spending: Travellers spent a staggering $31.7 billion abroad through the liberalised remittance scheme in FY24

Indian Overseas Spending: Indian travellers have set a new record in overseas expenditure, spending a staggering $31.7 billion abroad through the liberalised remittance scheme (LRS) in the financial year 2023-2024 (FY24). This marks a significant 17 per cent increase from the $27.1 billion spent in FY23, as reported by The Times of India (TOI). Despite measures such as tax collection at the source (TCS) aimed at curbing overseas spending, Indian globetrotters showed no signs of slowing down. However, a decline in the monthly average expenditure was observed following the enforcement of TCS in October 2023.

Surge in International Travel Spending

The latest remittance data reveals a strong preference among Indians for international travel, with expenditures reaching $17 billion in FY24. This represents a remarkable 24.5 per cent rise from the $13.6 billion spent in the previous fiscal year.

In FY24, the proportion of spending allocated to international travel within the LRS surged to 53.6 percent, up from 37 percent in FY20, prior to the Covid-19 pandemic. During FY21, expenditures on international travel had plummeted to $3.2 billion due to severe mobility restrictions.

Shifts in Overseas Education Expenditure

Conversely, the share of remittances dedicated to overseas education has been on a consistent decline. In FY21, education-related remittances accounted for 30 per cent, influenced by limited travel during the pandemic. This figure dropped to 26 per cent in FY22 following the easing of restrictions. In FY23, absolute spending on education fell to $3.4 billion from the previous year’s $5.2 billion, reducing its share of total expenditure to 12 per cent.

Changes in Foreign Exchange Spending Priorities

In FY24, spending on overseas education remained relatively stagnant at around $3.5 billion. According to the TOI report, reduced expenditure on fees has caused studying abroad to lose its position as the second-largest category in foreign exchange spending. Instead, Indians have allocated more funds towards supporting relatives abroad, with remittances in this category totalling $4.6 billion, surpassing educational expenses. This shift highlights changing priorities in how Indians utilise their foreign exchange, balancing between personal travel and familial support overseas.