Why in news?
Outward remittances by Indian residents under the Reserve Bank’s Liberalised Remittance Scheme fell to about US ${\approx}$ 1.94 billion in November 2025, the lowest level in two years. Travel, education and investments abroad all declined, reflecting seasonal factors and tighter spending.
Background
The Liberalised Remittance Scheme (LRS), introduced in 2004, allows resident individuals to send money abroad for permitted current and capital account transactions. The annual limit is currently US$250,000 per person. Under LRS people can pay for overseas studies, travel, medical treatment, gifts and maintenance of relatives, and invest in foreign stocks, properties or deposits. The scheme cannot be used for prohibited activities such as lottery tickets or margin trading.
November 2025 data and trends
- Travel expenses: Remittances for international travel amounted to around US $1.1 billion, lower than previous months as families avoided overseas holidays after the festive season.
- Education: Transfers for tuition fees and living costs were about US $121 million, down from US $163 million in October. The drop may reflect seasonal timing of university fees and a shift towards on‑campus payments.
- Maintenance of relatives: Money sent to support relatives abroad fell slightly as the rupee strengthened and fewer Indians relocated abroad during the period.
- Investments: Investments in foreign equity and debt dropped sharply, possibly due to volatile markets and expectations of slower global growth.
Significance
- Macro‑economic indicator: LRS outflows reflect how Indian families are spending on education, travel and overseas assets. Lower outflows can signal tighter budgets or changes in consumer confidence.
- Policy implications: Large remittances influence India’s foreign exchange reserves and the value of the rupee. The government periodically adjusts tax collected at source and reporting requirements to monitor outflows.
- Financial awareness: Individuals using the LRS should understand currency risks, taxation rules and the importance of diversifying investments.
Conclusion
The dip in November 2025 remittances appears seasonal, but it highlights the sensitivity of overseas spending to economic conditions. As global travel and education patterns evolve, the Liberalised Remittance Scheme remains a useful channel for families and investors.
Source: TH
