India's Outward Remittances Witness a Dip in August 2025

India's outward remittances under the Liberalised Remittance Scheme (LRS) fell 17.7% YoY in August 2025, reaching $2.6 billion, mainly due to reduced spending on international travel and education amid US visa restrictions. Travel outflows dropped 19.6%, education 23.4%, and medical remittances 47.8%. However, investment-related remittances grew, with property purchases up 60.2% and equity/debt investments rising 21.4%. Overall FY26 remittances declined 6.5%, reflecting changing financial priorities amid global challenges.

India's outward remittances under the Liberalised Remittance Scheme (LRS), overseen by the Reserve Bank of India (RBI), experienced a notable contraction of 17.7% year-on-year (YoY) in August 2025. The total remittances stood at $2.6 billion, a significant drop from the $3.21 billion recorded in the same period last year. The decline in remittances has been largely attributed to reduced spending on international travel and overseas education, with US visa restrictions playing a key role in curtailing outflows.

Travel and Education Spending Take a Hit

The LRS, launched in 2004, permits Indian residents to remit up to $250,000 annually for eligible current and capital account transactions. Over the years, the permissible limit has been gradually increased from the initial $25,000, making it a crucial tool for Indian individuals engaging in global financial transactions.

In August 2025, international travel, the largest contributor to remittances under the scheme, recorded a 19.6% YoY decline, amounting to $1.62 billion. Similarly, outflows for overseas education dropped sharply by 23.4% YoY, falling to $319.17 million compared to $416.4 million in August 2024. These reductions highlight the impact of tightened US visa regulations, which have dampened demand for international travel and education among Indian residents.

Declines Extend to Medical and Maintenance Categories

The contraction in remittances was not limited to travel and education. Funds sent abroad for medical treatment saw a staggering drop of 47.84% YoY, amounting to just $3.9 million in August 2025. Meanwhile, remittances for maintaining close relatives decreased by 13.74% YoY to $272.05 million.

Other categories also saw significant reductions. Transfers under the "gifts" category fell by 22.09% to $190.43 million, while the "others" category, encompassing miscellaneous transactions, plummeted nearly 67% to $6.7 million.

Investment Outflows Provide a Silver Lining

Amid widespread declines across most categories, investment-related remittances emerged as a bright spot. Funds allocated for the purchase of immovable property surged by an impressive 60.2% YoY to $36.02 million. Similarly, investments in equity and debt instruments recorded a robust growth of 21.45%, reaching $152.2 million. However, remittances for deposits under the scheme experienced a modest dip of 6.2%, standing at $42.75 million.

Cumulative Decline in FY26

Between April and August of the 2025–26 financial year (FY26), overall outward remittances totaled $12.02 billion, marking a 6.5% YoY decline. The contraction was broad-based across most categories, with the exception of investment-related outflows, which continued to demonstrate resilience.

The data underscores a shift in remittance patterns, with discretionary spending on travel, education, and healthcare seeing sharp reductions, while investments in assets and financial instruments have gained momentum. This trend reflects the evolving priorities of Indian residents amid global economic and regulatory challenges.