Sending money abroad: April marks 50-month low at $499 mn

The monthly outward flow in April 2020 is lowest since February 2016 when it was $449.28 million.

Read| Resident Indians remit record $18.75 bn in FY20; travel, education LRS dominate

Under LRS, resident individuals, including minors, may remit up to $250,000 per financial year for permissible current or capital account transactions or a combination of both.

A dip in outward remittances was seen in March 2020, too, but it plummeted the following month.

The sharpest decline — 71.81% — has been recorded in money sent for travel purposes which came down to $121.13 million in April this year from $429.75 million a year ago.

This is significant as an estimated 2 million Indian nationals travel overseas every month.

The money sent for studies abroad has also seen a sharp decline of 68.85% — $78.76 million in April this year from $252.84 million in the corresponding month last year.

Over 7 lakh Indian students pursued studies in foreign institutions in 2018.

“Maintenance of close relatives” category, which contributes the highest amount to total outward remittances under LRS has recorded a decline of 50%— $148.25 million in April this year from $296.14 million last year.

Substantial decline has been recorded in money sent for purchase of immovable property abroad; investment in equity/debt; deposit; gift; medical treatment; and other categories during April 2020. The only exception is “donations” which contribute a negligible amount to the total outflows.

Read| Remittances to India likely to decline by 23% in 2020 due to COVID-19: World Bank

While the category “Gift” has recorded a 66% decline in outward remittances, “medical treatment” has seen a decline of 45.85% in April 2020. But the amount remitted for medical treatment purposes is negligible.

Two categories, which recorded lesser decline are — ‘deposit’ and ‘investment in equity/debt’. The amount of money sent out of the country for the purpose of deposit just declined by 7.69% in April 2020 compared to the same month last year. Similarly, ‘deposit’ and ‘investment in equity/debt’ has recorded a decline of 29.91%.

Resident Indians have remitted a record $18.75 billion under LRS in the financial year ended March 31, 2020.

Despite the outflows reaching a record level during last financial year, March, 2020 saw a dip — $1,358.82 million — against $1,476.82 million in the corresponding month of 2019.