Travel leads foreign spends to 10 month high in July

Mumbai: Outward remittances by Indians rose to their highest level in 10 months to nearly $2.8 billion in July 2024. The increase is the result of a spike in overseas travel spending, the share of which also jumped to 60% from 51% a year ago.
Indians spent $1.6 billion in overseas travel in July as against $1.3 billion in June and an average of $1.2 billion in the first quarter.Besides students travelling abroad for summer admissions, July also saw a spike in leisure travel including for destination weddings in the first half of the month.

The total remittances during July represent a 16.7% increase over the year-ago period. While the largest surge in absolute terms was observed in travel – which grew by 17.1% – investment in equity/debt and remittances for medical treatment witnessed considerable growth too, with increases of 108.2% and 104.3% respectively. The share of these two items, however, is relatively smaller at only $120.2 million and $8.6 million respectively. Remittances for deposits saw a drop of 16.8% year-on-year.
The current calendar year had seen a modest dip in overseas spending after govt introduced tax collection at source on forex remittances from Oct 2023. As a result, monthly spends until July were lower than last year’s average spending of Rs 2.6 billion per month. Similarly, monthly spends on travel since Oct have been below last year’s average of $1.4 billion too.
Indians spending money overseas under the liberalised remittance scheme has gone up from just over $1 billion annually in FY14 to over $31.7 billion in FY24. While one big reason for this is the increase in the number of holidays overseas, there has also been a massive jump in the number of students opting for international education.