According to the Reserve Bank of India (RBI) latest data released in May 2025, outward remittances under its Liberalised Remittance Scheme (LRS) declined by 6.85% Year-on-Year (Y-o-Y) to USD 29.56 billion in Financial Year 2024-25 (FY25), compared to USD 31.74 billion recorded in FY24.
- RBI cited certain factors which mainly contributed to the decline of outward remittances in FY25: global uncertainty, stagnant domestic income growth, and a high base effect.
- However, the same RBI data revealed that outward remittances have increased by 10.65% Year-over-Year(Y-o-Y) to USD 2.55 billion in March 2025, driven by growth in international travel.
- The data noted that the most major components of LRS registered growth except: remittances for studies abroad and medical treatment, which have decreased by 18.77% and 56.30% Y-o-Y, respectively.
Key Findings of FY25 :
i.As per RBI’s data, the overall decline in outward remittances is mainly due to a 16% decrease in funds remitted by students for studies abroad, which dropped from USD 3.48 billion (in FY24) to USD 2.92 billion (in FY25).
ii.The data showed that international travel remittances, which accounts for nearly 60% of outward remittances, have also decreased marginally by 0.25%, from USD 17 billion (in FY24) to USD 16.96 billion (in FY25).
- The data further noted that despite this marginal decrease, travel remittances have increased significantly over the last 4 years, registering a growth of 144% from USD 6.95 billion registered in FY21.
iii.The RBI data revealed that investment in equity and debt overseas by resident Indians increased by 12.51% to USD 1.699 billion (in FY25), compared to USD USD 1.51 billion in FY24. The purchase of immovable property abroad increased by 33.11% YoY to USD 0.32 billion.
iv.As per RBI’s data, Funds sent for the maintenance of close relatives dropped by 19.28% to USD3.72 billion, while remittances for overseas education fell by 16.09% to USD2.92 billion in FY25.
Key Findings of Remittances in March 2025:
i.As per RBI’ data, the outward remittances surged by 30% Month-on-Month (M-o-M), to nearly 2.6 billion in March 2025 compared to USD 1.96 billion in February 2025.
- This growth was mainly driven by increase in deposits and family maintenance.
ii.The data highlighted travel expenses accounted for 44% of remittances in March 2025, followed by family maintenance (17%), gift (12%) and investment in debt and equity (12%).
iii.Also, the investment in debt and equity witnessed an exponential increase of 235%, to USD 306 million in March 2025 as against USD 174 million in February 2025.
About Liberalised Remittance Scheme (LRS):
i.The scheme was introduced by the RBI in February, 2004, to simplify and streamline the process of remitting funds overseas.
ii.The scheme allowed all resident individuals (including minors) to freely remit up to USD 2, 50,000 per financial year (April-March) for any permissible current or capital account transaction or a combination of both.
Note: In February 2025, the Union Budget for FY26 increased the threshold for collecting Tax Collected at Source (TCS) on LRS transactions from Rs 7 lakh to Rs 10 lakh.
About Reserve Bank of India (RBI):
Governor- Sanjay Malhotra (26th)
Headquarters- Mumbai, Maharashtra
Established- April 01, 1935
