International travel drives outward remittance under LRS to $2.7 bn in July

Outward remittances under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS) increased by 16.7 per cent year-on-year (Y-o-Y) to $2.75 billion in July 2024 compared to $2.36 billion last year, driven by international travel.

The LRS scheme was introduced in 2004, allowing all resident individuals to remit up to $250,000 per financial year for any permissible current or capital account transaction, or a combination of both, free of charge.

In the initial phase, the scheme was introduced with a limit of $25,000, which was gradually revised.

International travel—the largest segment, which accounts for 60 per cent of the remittances—grew by 17.09 per cent Y-o-Y to $1.66 billion from $1.42 billion in July 2023. Similarly, remittances for the maintenance of close relatives rose by 19.5 per cent to $337.4 million.

Likewise, remittances under the ‘gift’ category rose by nearly 41 per cent from last year to $275.26 million.

Investments in equity and debt schemes surged by 108 per cent to $120.86 million from $58.06 million. Remittances for studies abroad grew marginally to $272.16 million. The purchase of immovable property grew by nearly 65 per cent to $24.54 million.

On the other hand, remittances for deposits dropped by 16.8 per cent Y-o-Y to $41.68 million.

Sequentially, remittances under the scheme grew by 26.22 per cent from $2.18 billion in June 2024. Remittances had witnessed a 24.39 per cent decline in the first quarter of FY25 (Q1 FY25) to $6.9 billion on account of the base effect.