KOCHI: India is the world’s largest remittance recipient. Though not at the same rate, outward remittance from the country is also showing an upward trend now. Indians are now shelling out money in order to maintain the lifestyle of close relatives, for travel and for studies abroad.
The total amount spent by Indians for ‘overseas purposes’ in February 2016 was Rs 2,997 crore, compared to only Rs 817 crore during the same period last year. In the first two months of 2016 alone, people in India have sent Rs 6,560 crore abroad. The number was only Rs 8,843 crore for the whole of the 2014-15 financial year.
Even though the depreciation of Indian currency has contributed a little in the spurt in outward remittance (last February the average exchange rate was INR / 1 USD: 62 and now it is 66.7), it is evident that Indians are now spending more money in foreign countries.
“One of the many reasons for an increase in outward remittances is definitely because more and more students are going abroad to pursue higher education and relatives maintaining them overseas by sending money. The government’s move of raising the permissible limit on outward remittances from $125,000 to $250,000 (with further allowances for education and medical expenses) has additionally allowed people to remit outward more through the organised channels for that purpose,” said Kiran Shetty, Regional Vice President and Managing Director, South Asia, Western Union.
He added that the government’s move has also allowed people to start investing outside for business and other purposes which has added to the flow of outward remittances.
Indians have spent more money for maintenance of close relatives (Rs 915 cr), overseas travel (Rs 877 cr) and for studies abroad (Rs 580 cr). The increase in outward remittances to blue collared workers in India who send money home to Nepal and Bangladesh also contributed to the trend.
“Even though there were minor hiccups, the Indian economy has been growing for the past one decade. Hence the purchasing power of people had increased and Indians started traveling abroad in large numbers,” said S Irudaya Rajan, Chair Professor, Ministry of Overseas Indian Affairs.
“Also, many countries have started offering visa-on-arrival. This has contributed lavishly to the increase in outward remittance. More and more students now want to study abroad, which is another major contributor,” he added.
India retained its top spot in 2015, attracting about $69 billion in remittances, down from $70 billion in 2014.