NRI Connect

From $651 mn to $2.5 bn in a year: 3-fold surge in spending by Indians on foreign travel

From $651 mn to $2.5 bn in a year: 3-fold surge in spending by Indians on foreign travel

INDIAN TRAVELLERS are splurging money abroad, much more than before, according to the latest Reserve Bank of India data on foreign exchange for overseas travel. The data released Tuesday show that Indians spent $2.56 billion in foreign exchange while travelling abroad in the financial year 2016-17 — a whopping three-fold rise when compared to $651.4 million in 2015-16.

With spending by travellers on the rise, the total forex remittances under the Liberalised Remittance Scheme (LRS) of the RBI surged by 76 per cent to $8.17 billion in 2016-17, against $4.64 billion in the previous year. Remittances for maintenance of close relatives also rose to $2.169 billion from $1.37 billion in the previous year. Also, remittances for Indian students abroad increased to $1.536 billion from $1.20 billion in 2015-16, RBI data show. According to the RBI, forex release for travel was below $100 million till last year — $15.9 million in 2013-14, $44.9 million in 2012-13 and $34.9 million in 2011-12.

“More and more Indians are travelling… and they don’t mind spending abroad,” said a senior official with a nationalised bank.

Deposits of Indians abroad, too, more than doubled to $283.8 million in 2016-17 from $109.9 million last year. Indian investments in overseas equity and debt also increased to $443.6 million from $317.9 million. However, the RBI has banned remittances from India for margins or margin calls to overseas exchanges or overseas counterparty, the purchase of foreign currency convertible bonds issued by Indian companies in the overseas secondary market and trading in foreign exchange abroad. Read more…

From $651 mn to $2.5 bn in a year: 3-fold surge in spending by Indians on foreign travel