Forex spends by Indians drop 2% to $29 billion in FY26

MUMBAI: Total outward remittances under the Liberalised Remittance Scheme (LRS) witnessed a contraction in FY26, dropping about 2% to $29 billion from the $29.6 billion recorded in FY25.

This downward trajectory highlights that visa restrictions are impacting overseas education spending, which plummeted 20.9% from $2.9 billion to $2.3 billion, alongside a 3.1% dip in international travel. Despite the marginal percentage drop, travel remains the single largest overarching expense item under the LRS, accounting for $16.4 billion in FY26.

In stark contrast to declining lifestyle expenses, asset-backed outflows grew aggressively, even though they rose from a relatively low base compared to consumption categories. The purchase of immovable property abroad emerged as the fastest-growing segment, surging 63.8% to reach $528.7 million up from $322.8 million in the previous year.

Similarly, investment in overseas equity and debt securities experienced a robust 56.1% growth spike, jumping from $1.7 billion in FY25 to $2.7 billion in FY26, highlighting a prominent shift toward global wealth diversification among domestic retail capital.

March 2026 bucked the broader quarterly trends by showcasing a distinct sequence of monthly shifts, heavily influenced by sudden geopolitical shockwaves. Total monthly remittances stood at $2.6 billion in March compared to $2.3 billion in Feb-a sequential change in dollar flow that was heavily constrained under the surface by a drastic slide in international travel.

Following the late-Feb outbreak of the US-Iran war and subsequent airspace closures across West Asia, travel-related LRS remittances plummeted from $1.3 billion in Feb to $1 billion in March.

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