Outward remittances under LRS surge 20% to $2.5 billion in June: RBI data

International travel and overseas investments drove the increase in June, with equity and debt investment remittances more than doubling year-on-year to $456.7 million

Outward remittances under the Liberalised Remittance Scheme (LRS) for resident individuals surged 19.9 per cent year-on-year (Y-o-Y) in in the April-June period of FY27 to $2.5 billion, owing to a rise in international travel and overseas investments, according to the RBI data. 

During the month, deposit-related remittances rose 67.95 per cent Y-o-Y to $70.74 million. Similarly, remittances for the purchase of equity and debt investments more than doubled to $456.7 million. Remittances for the purchase of immovable property also rose 31.5 per cent Y-o-Y to $49.66 million. The largest component — travel —rose 10.7 per cent Y-o-Y to $1.37 billion compared with last year. 

 

Madan Sabnavis, chief economist, Bank of Baroda, said: “June is the time of holiday and due to which travel segment has seen a substantial surge supporting the overall remittances. However, the growth is periodical and is not likely to sustain.”

Remittances for overseas education were down 30.3 per cent Y-o-Y to $96.76 million, while those for ‘gifts’ rose 11 per cent to $211.5 million. 

The LRS 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. The scheme initially had a limit of $25,000, which was gradually revised. 

Remittances rose 4.5 per cent to $7.23 billion, led by investment in equity and debt, which doubled to $1.06 billion, and a 48.6 per cent rise in deposit-related remittances to $283.65 million. Remittances for the purchase of immovable property rose 8.45 per cent to $134.6 million, while travel-related remittances were down 2.25 per cent Y-o-Y to $3.8 billion.