Liberalised Remittance Scheme: Indians’ Overseas Spending Falls to Two-Year Low

Liberalised Remittance Scheme Latest News

Outward remittances from India under the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS) have crossed $20 billion during the first eight months of 2026.

About Liberalised Remittance Scheme

• It is part of the Foreign Exchange Management Act (FEMA) 1999, which lays down the guidelines for outward remittance from India. 
• It was introduced on February 4, 2004.
• Remittance Limit: Under LRS, all resident individuals, including minors, are allowed to freely remit up to USD $250,000 per financial year (April–March). 
• This can be for any permissible current or capital account transaction, or a combination of both.
• Eligibility: Only individual Indian residents, including minors, are permitted to remit funds under LRS.
• Frequency of Remittances: There is no restriction on the frequency or number of transactions during a financial year. 
• Types of transactions permitted
  • Opening of a foreign currency account abroad with a bank;
  • Acquisition of immovable property abroad, overseas direct investment (ODI), and overseas portfolio investment (OPI);
  • Extending loans, including loans in Indian Rupees to non-resident Indians (NRIs) who are relatives as defined in the Companies Act, 2013;
  • Private visits abroad (excluding Nepal and Bhutan); 
  • Maintenance of relatives abroad;Medical treatment abroad; Pursuing studies abroad;
  • Any other current account transaction that does not fall under the definition of current account (FEMA 199);
• Types of transactions not permitted
  • Remittance for purposes specifically prohibited, such as buying lottery tickets or restricted items.
  • Remittance for buying Foreign Currency Convertible Bonds (FCCBs) issued by Indian companies in the overseas secondary market.
  • Sending money for trading in foreign exchange abroad.
  • Sending money to individuals and entities identified as posing a significant risk of terrorism.
  • Sending money to countries identified as “non-cooperative countries and territories” by the Financial Action Task Force (FATF).

Source: IE

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