Outward remittances through RBI's LRS hit an all-time high in FY22

Outward remittances under the Reserve Bank of India’s (RBI’s) liberalised remittance scheme (LRS) was at an all-time high in FY22, as it made a strong comeback from the previous year’s tepid show because of Covid-19-led disruptions. The comeback was aided by Indian’s spending more on international travel and overseas education.

In FY22, outflows under the LRS scheme was to the tune of $19.61 billion, up 54.6 per cent from FY21, data released by the RBI showed. In FY21, outward remittance under the scheme was $12.68 billion; in FY20 it was $18.76 billion; and in FY19 it was $13.78 billion.

As Covid-related restrictions eased in various countries in FY22, international travel picked up, resulting in India's spending $6.91 billion on travel, which is more than double that was spent on travel in FY21. In FY20, however, spends on travel by Indians was also almost $6.95 billion. This indicates overseas travel spends is back to pre-Covid levels.

The LRS scheme of the RBI was introduced in 2004, under which, all resident individuals, including minors, are allowed to freely remit up to $250,000 per financial year for any permissible current or capital account transaction or a combination of both. The scheme was introduced on February 4, 2004, with a limit of $25,000.

Overseas education is another segment that has seen healthy growth in FY22 as Indians remitted over $5.17 billion in the year, up 35 per cent from FY21, where Indians had remitted $3.83 billion. In FY20, remittances for overseas education was nearly $5 billion.

Another segment that saw a healthy rise was “gifts”. Indians remitted $2.34 billion as gifts in FY22, up 47.28 per cent over FY21.

In FY20, Indians remitted about $1.91 billion as gifts under the LRS scheme.