RBI Data: Outward Remittances under LRS decline 6.85% to USD 29.56 billion in FY25

Current Context: The Reserve Bank of India (RBI) released data on May 23, 2025, showing a 6.85% decline in outward remittances under the Liberalised Remittance Scheme (LRS).

• In FY25, remittances dropped to USD 29.56 billion, compared to USD 31.73 billion in FY24.

Key Reasons for Decline:

• Economic Uncertainty: Global financial volatility affected remittance trends.
• Rupee Depreciation: Exchange rate fluctuations discouraged large transfers.
• Education Remittances: Fell 16.09% YoY to USD 2.92 billion, reflecting shifting study-abroad patterns.
• Medical Treatment Remittances: Dropped 56.30% YoY, likely due to improved domestic healthcare options.
• Travel Spending: The largest segment, accounting for 60% of total remittances, dipped 0.25% YoY to USD 16.96 billion.

Notable Growth Areas:

• Equity & debt investments rose by 12.45% YoY to USD 1.69 billion.
• Purchase of immovable property increased by 33.11% YoY to USD 0.32 billion.
• March 2025 Surge: Remittances grew 10.65% YoY to USD 2.55 billion, driven by international travel.

Question:

Q.1 As per RBI Data, What was the percentage decline in outward remittances under LRS in FY25 compared to FY24?
a) 6.85%
b) 5.50%
c) 7.20%
d) 8.10%

Answer: a) The RBI data explicitly states a 6.85% YoY decline in outward remittances under LRS, from USD 31.73 billion (FY24) to USD 29.56 billion (FY25).