{"id":42104,"date":"2025-04-26T19:12:41","date_gmt":"2025-04-26T13:42:41","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=42104"},"modified":"2025-04-26T19:12:53","modified_gmt":"2025-04-26T13:42:53","slug":"overseas-remittances-lrs-down-29-percent","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/26-04-2025\/overseas-remittances-lrs-down-29-percent","title":{"rendered":"Overseas Remittances by Indians under LRS were Down 29%"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Overseas remittances<\/strong> by Indian residents under the <strong>Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI) fell by 29% to $1,964.21 million in February 2025 from $2,768.89 million in January<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Liberalised Remittance Scheme (LRS)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>LRS is part of the<strong> Foreign Exchange Management Act (FEMA) 1999 <\/strong>which lays down the <strong>guidelines for outward remittance from India.\u00a0<\/strong><\/li>\n\n\n\n<li>Under the Scheme, resident individuals, including minors, can <strong>freely remit up to $2,50,000 per financial year<\/strong> for permissible current or capital account transactions.\n<ul class=\"wp-block-list\">\n<li>These transactions include education, medical treatment abroad, purchase of property, and investments in foreign stocks.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The Union Budget in February 2025<strong> increased the threshold for collecting Tax Collected at Source (TCS) <\/strong>on LRS transactions from <strong>Rs 7 lakh to Rs 10 lakh.\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>This change was expected to <strong>benefit the travel and foreign exchange sectors,<\/strong> providing a boost to outbound tourism, education and the airline sectors.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reasons for Decline:\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The number of <strong>Indian students heading to foreign universities <\/strong>has simultaneously <strong>declined <\/strong>across the <strong>top three destination countries <\/strong>\u2014 Canada, the United States and the UK.\n<ul class=\"wp-block-list\">\n<li>The data shows a sharp <strong>decline of at least 25% Indian students <\/strong>receiving study permits across these key destinations in 2024.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>A good number of people <strong>dropped or postponed their travel plans <\/strong>since the global economy and markets faced volatile movements during the period.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Remittances<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Remittances <\/strong>are a way to electronically send funds to people, often family, in another country.\n<ul class=\"wp-block-list\">\n<li>Usually sent by individuals working in foreign countries, especially those employed in blue-collar or skilled jobs.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Impact:<\/strong> Remittances are a significant source of income for many countries, contributing to their economic stability, supporting local economies, and sometimes helping to finance national trade deficits.<\/li>\n\n\n\n<li><strong>Modes of Transfer:<\/strong> Remittances can be sent through banks, money transfer operators, or digital platforms.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Two Types of Remittances<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>There are two types of remittances based on the transaction purpose<strong>: Inward Remittance and Outward Remittance<\/strong>.\n<ul class=\"wp-block-list\">\n<li><strong>Inward Remittance:<\/strong> The term inward remittance indicates transfer of funds from one account to another either domestically or internationally.<\/li>\n\n\n\n<li><strong>Outward Remittance: <\/strong>The transfer of funds out of the country or overseas is termed as outward remittance.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>India\u2019s Remittances<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India&#8217;s remittances have more than doubled<\/strong> from $55.6 billion in 2010-11 to $118.7 billion in 2023-24.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"dbc59c\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"630\" height=\"393\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/trickle-to-flood.png\" alt=\"trickle to flood\" class=\"not-transparent wp-image-42107\" style=\"--dominant-color: #dbc59c; width:498px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/trickle-to-flood.png 630w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/trickle-to-flood-300x187.png 300w\" sizes=\"auto, (max-width: 630px) 100vw, 630px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>U.S. and U.K. Contribution:<\/strong> Remittances from the U.S. and U.K. nearly doubled to 40% of total inward remittances in FY24, up from 26% in FY17.\u00a0<\/li>\n\n\n\n<li><strong>U.S. as Leading Contributor:<\/strong> The U.S. became the top source of remittances in FY21, contributing 23.4%. This increased to nearly <strong>28% in FY24.<\/strong><\/li>\n\n\n\n<li><strong>UAE&#8217;s Role: <\/strong>UAE is still the <strong>second-largest remittance source,<\/strong> contributing 19.2%, with Indian migrants in blue-collar jobs like construction, healthcare, hospitality, and tourism.<\/li>\n\n\n\n<li><strong>Singapore&#8217;s Rising Share: <\/strong>Singapore&#8217;s share reached 6.6% in FY24, up from 5.5% in FY17, marking its highest share since then.<\/li>\n\n\n\n<li><strong>State-wise Distribution: <\/strong>Half of the remittances went to Maharashtra, Kerala, and Tamil Nadu. Other states like Haryana, Gujarat, and Punjab had smaller shares (below 5%).<\/li>\n\n\n\n<li><strong>Size of Remittances: <\/strong>Remittances above \u20b95 lakh accounted for 28.6% of total remittances, while 40.6% of the remittances were \u20b916,500 or less.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/banking-and-finance\/overseas-remittances-by-indians-under-lrs-were-down-29-in-february-to-1964-21-mn-heres-why-9966202\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">Overseas remittances by Indian residents under the Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI) fell by 29% to $1,964.21 million in February 2025 from $2,768.89 million in January.<\/li>\n<p><\/p>\n<h3><strong>The Liberalised Remittance Scheme (LRS)<\/strong><\/h3>\n<li class=\"ms-5\">LRS is part of the Foreign Exchange Management Act (FEMA) 1999 which lays down the guidelines for outward remittance from India.\u00a0<\/li>\n<li class=\"ms-5\">Under the Scheme, resident individuals, including minors, can freely remit up to $2,50,000 per financial year for permissible current or capital account transactions.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/26-04-2025\/overseas-remittances-lrs-down-29-percent\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-42104","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/42104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=42104"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/42104\/revisions"}],"predecessor-version":[{"id":42139,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/42104\/revisions\/42139"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=42104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=42104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=42104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}