Foreign spends continue to decline, fall to $2.3bn in May – Times of India

MUMBAI: Indians are sending less money abroad. Under the liberalised remittance scheme (LRS), overseas remittances by resident individuals fell to $2.3 billion in May 2025 from $2.5 billion in April. This marks a further decline from the average monthly outflow of $2.5 billion in FY25 and $2.8 billion in FY24.While sending money abroad for education has taken a hit because of visa restrictions, the trend reflects a broader effort by the government to curb capital outflows through increased scrutiny of funds sent under the ‘gift’ route. Over the past year, authorities have introduced a tax collected at source (TCS) on foreign remittances and have mandated utilisation of funds sent abroad within 180 days failing which they have to be repatriated. This in effect prevents Indians from maintaining idle funds in foreign deposits. Also, caps on overseas investments by mutual funds, constrained avenues for overseas investment.In May, the decline was broad-based. Outflows for equity and debt investments fell by almost half, from $203 million in April to $105 million in May. Gifting also declined from $291 million to $233 million. Remittances for maintaining close relatives abroad fell from $398 million to $323 million. Spending on education and property purchases abroad also moderated.Even travel, which had rebounded post-pandemic, showed signs of tempering. Outflows rose from $1.3 billion in April to $1.4 billion in May, but the pace was slower than in previous months.