Sharp Rise in Outbound Remittances From India, Shows RBI Data
About $1.2 billion was sent abroad in January this year by Indians, the Reserve Bank of India data showed.
The outflow of remittances from individual residents of India during the month of January 2018 set a new record, with $1.2 billion being sent abroad, according to data from the Reserve Bank of India (RBI).
The outflow was as much as $8.17 billion between April 2017 and January 2018, the Economic Times reported, citing the RBI figures. The figure has more than doubled from the same period last year as more people are paying for children’s education in universities overseas, foreign tourism and spending money on gifting relatives staying abroad, the statistics showed. As much as $4.6 billion was sent by Indians overseas during the first 10 months of 2016-17.
Resident Indians can send up to $250,000 per year to their relatives overseas for gifts or donations, maintenance of close relatives abroad, business trips, and medical treatment or studies abroad, besides other reasons.
Approximately 90 per cent of the outbound remittances were meant for education, tourism, and payments and gifts to relatives in foreign countries, the report added. Although outflows were limited to $50,000 a year initially, the amount was increased gradually to $250,000 a year per person.
“It is clear Indians are traveling abroad more and also high net worth individuals are encouraging their offspring to study abroad and sponsor their education,” Moin Ladha, a partner at law firm Khaitan & Co, was quoted as saying in the report.
The trend had earlier prompted Western Union to offer its Indian users an option for outward remittances. “We have got this outbound license to send money out of India. With the Indian economy growing stronger, people want to send money abroad to relatives, to invest in businesses and to students overseas. You can pay me in rupees and I can pay in any currency,” Western Union chief executive Hikmet Ersek had said then.
In 2017, RBI data showed that the money sent abroad for education grew to $278 million in September 2017 from $160 million a year ago. Also, the money sent abroad for travel increased to $398 million in September 2017 from $217 million in 2016, and that spent for the upkeep of close relatives grew from $160 million in September 2016 to $227 million in September 2017, according to a Business Standard report.
It is not just the outward remittances that have grown. India is also expected to receive increased remittances from abroad this year. India’s remittances are expected to grow at 2.5 per cent in 2018, according to the World Bank report released on Oct. 3. India was also the top remittance receiving nation from the United Arab Emirates in the fourth quarter of 2017, revealed statistics from the UAE’s monetary authority. India received a total of Dh14.8 billion, which comprised 34.2 per cent of the total remittances worth Dh43.2 billion during the fourth quarter.