The outflow seems to be on an incline with different sectors including purchase of immovable property, deposits, debt, investment in equity, sending of gifts, donations, international travel, maintenance of close relatives, medical treatment and studies abroad showcasing an upward trend.
Travel and education remittance formed the highest share of outward remittance for FY22. The travel segment is fast catching up with the pre-Covid levels as Indians fly abroad after international travel resumption.
Various sectors including purchase of immovable property, deposits, debt, investment in equity, sending of gifts, donations, international travel, maintenance of close relatives, medical treatment and studies abroad showcased an upward trend.
The outflow seems to be on an incline with $1968.77 million being remitted in March 2022, against $1547.80 million in March 21. In FY21, the outward remittances were about $18760.69 million which increased to $19610.77 million in 2021-22.
As Covid restrictions eased around the globe, international travel picked up for Indian customers. Consumers spent $6.91 billion on travel in the fiscal year ending March 2022. Though spending was down slightly from FY20, at almost $6.95 billion, it appears to have returned to pre-Covid levels for the time being and is expected to grow rapidly.
Another segment to witness an outstanding growth is education. Indians remitted over $5.17 billion in FY22, up by 35% from $3.83 billion in FY21. In FY20 overseas education remittances were nearly $5 billion. It is expected to grow steadily on the back of favorable government policies, expanding overseas education space and increasing volume & value of student traffic on account of improving quality.
Remittances for investments in equity and debts also went up from $431.41 million in 2019-20. to $746.57 million in 2021-22. This growth can be attributed to more capital being generated for these types of transactions because of the growing number of Indians who plan on investing abroad and buying US stocks and foreign bonds.
Indian investors find it a great opportunity to invest in foreign stocks to diversify their portfolio and own a small piece of the largest multinational firms in the world. This has led to increased foreign investments and remittances being generated in recent years.
Other segments like gifts also witnessed an increase. Indians remitted $2.34 billion as gifts in FY22, up by 47.28% over FY21.
The maximum amount of remittances is governed by RBI's (Reserve Bank of India) Liberalized Remittance Scheme rules which currently allows any resident individual including a minor to remit up to 2.5 lakh US dollars (approximately Rs 1.92 crore).
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