Foreign exchange remittances had averaged over $3 billion a month between April-Sept 2023 earlier than the elevated tax assortment at supply (TCS) got here into impact in October. The introduction of the TCS noticed remittances drop sharply from almost $3.5 billion in Sept to about $2.2 billion in a month’s time.
Figures launched by RBI in its month-to-month bulletin present that the decline continued throughout Nov, with the overall quantity remitted overseas dropping by $298 million with a month to almost $1.9 billion. The Liberalised Remittance Scheme (LRS) permits each Indian to ship as much as $250,000 overseas yearly.
The decline was seen throughout all classes, with the utmost drop seen in spending on international journey, adopted by research overseas. In Nov, the overall spend on journey was $1.2 billion — about $189 million decrease than earlier months. Earlier than the tax was imposed in Oct, the common month-to-month spend on journey in FY24 was $1.5 billion. The remittance for research dropped by $61 million to $208 million in Nov in comparison with $269 million in Oct. The typical remittance for research earlier than the TCS was $306 million.
In proportion phrases, the largest fall was in cash despatched for fairness funding overseas, which halved to $41 million in Nov from $84 million within the earlier month. Oct itself had seen remittances for funding drop greater than half from $208 million in Sept.
Authorities had elevated the tax assortment at supply on remittances underneath the LRS from 5% to twenty%.
