Decline in Overseas Remittances: Analyzing the Recent Trends

Overview of the Decline

Recent statistics reveal that overseas remittances by Indian residents have dropped to USD 2.3 billion in May 2025, continuing a concerning downward trend observed in the preceding months.

This reduction is largely attributed to stringent regulatory measures enacted by the government, which include tax collection at source (TCS) and firm timelines for funds’ utilization abroad. Consequently, outflows related to investments, gifts, and family maintenance have plummeted, reflecting a broader moderation in expenditures on significant sectors like education, property, and travel.

Key Statistics

Under the liberalised remittance scheme (LRS), remittances dropped from USD 2.5 billion in April 2025 to USD 2.3 billion in May, marking a notable decline when compared to the average monthly outflow figures of USD 2.5 billion and USD 2.8 billion in FY24 and FY25, respectively.

Contributing Factors

• Visa Restrictions: Stricter visa regulations have significantly hindered expenditures on education abroad.
• Increased Government Scrutiny: There is a pronounced effort by regulatory bodies to limit capital outflows through enhanced monitoring of funds sent via the gift route.
• Tax Regulations: The introduction of TCS on foreign remittances and mandates requiring the repatriation of unutilized funds within 180 days have discouraged many from making large remittances.

Breakdown of Outflows

In May, the decline was widespread across various categories. Outflows for equity and debt investments dwindled to USD 105 million, dropping almost 50% from USD 203 million in April. Gifting also saw a reduction, falling from USD 291 million to USD 233 million, and funds sent for supporting relatives dropped from USD 398 million to USD 323 million.

Impact on Travel Expenditures

Interestingly, expenditures on travel, which had shown a rebound following the pandemic, are beginning to lose momentum. Even though outflows for travel increased from USD 1.3 billion in April to USD 1.4 billion in May, the growth rate is far slower than what was observed in the earlier months.

Future Implications

This declining trend in remittances could adversely affect the travel and tourism sector, putting pressure on taxi and transfer services. With less money being sent abroad for travel purposes, there could be a significant shift in demand for transfers, which are crucial for efficient travel experiences.

LocalsRide.com stands as a potential solution for travelers seeking reliable and personalized transfer services during their journeys. Offering the ability to select specific vehicles, view comprehensive details about makes and models, and access outstanding transparency and ratings, it fills a vital gap left by traditional booking methods.

Conclusion and Call to Action

The current insights highlight the crucial connection between overseas remittances and travel. While the overall conclusion may seem grim, it is important to note that personal experiences around travel can vary widely. To make more informed decisions without incurring unnecessary expenses, customers can explore services offered by verified providers on LocalsRide. This enables travelers to access suitable taxi and transfer options at reasonable fares without the worry of unforeseen costs.

Start planning your next adventure with confidence and a sense of security. Book your worldwide transfer with LocalsRide, a platform that prioritizes user affordability and vehicle selection, ensuring you enjoy every ride. LocalsRide.com