India's forex spends slip 2% as education spending abroad falls
What's the story
The total outward remittances under the Liberalized Remittance Scheme (LRS) have fallen by some 2% in FY26. The decline is from $29.6 billion in FY25 to $29 billion this fiscal year. The decrease indicates that visa restrictions are affecting overseas education expenditure, which has also seen a significant drop of 20.9%.
Spending reduction
International travel remains top expense
The fiscal year 2025-26 saw a decrease in international travel expenses by 3.1%, in addition to the drop in overseas education spending. Despite these declines, international travel still accounts for the largest share of LRS spending at $16.4 billion this fiscal year. This trend underscores how visa restrictions are affecting Indians' ability to study abroad and travel internationally.
Investment growth
Surge in asset-backed outflows
In contrast to the decline in lifestyle expenses, asset-backed outflows have seen a significant increase. The purchase of immovable property abroad has emerged as the fastest-growing segment, witnessing a whopping 63.8% jump to $528.7 million from last year's $322.8 million. Investments in overseas equity and debt securities also saw a massive 56.1% growth spike, rising from $1.7 billion in FY25 to $2.7 billion in FY26, indicating a shift toward global wealth diversification among domestic retail capital investors under LRS guidelines.
Monthly shifts
Geopolitical events and their impact on remittances
March 2026 defied quarterly trends with a distinct pattern of monthly changes, largely driven by sudden geopolitical shocks. Total monthly remittances were $2.6 billion in March, up from $2.3 billion in February, a sequential change in dollar flow heavily constrained by a sharp decline in international travel after the outbreak of the US-Iran war and subsequent airspace closures across West Asia.