Indians may find it harder to invest in companies such as Nvidia, Amazon, Apple, Alphabet and Palantir Technologies, buy property in Europe, or fund overseas education if the government decides to tighten rules under the Liberalised Remittance Scheme (LRS).
The possibility of tighter remittance rules comes as policymakers grapple with pressure on India’s external account, with the rupee weakening to a record low against the dollar amid rising oil prices and uncertainty linked to the West Asia conflict. Any restrictions under the scheme, however, would have implications beyond overseas investing, affecting property purchases, travel and education spending.
Managing the current account deficit and preventing further rupee weakening would be among the government’s top priorities this fiscal, chief economic adviser V Anantha Nageswaran said on May 12. His comments came on the day the rupee fell to a new low of 95.74 against the dollar.
Prime Minister Narendra Modi on May 10 also urged citizens to postpone non-essential foreign travel for a year as part of a broader call for economic austerity.
“The growing culture of weddings abroad, travelling abroad, and vacationing abroad is becoming prevalent among the middle class. We must decide that during this time of crisis, we should postpone travelling abroad for at least a year,” he said.
A Moneycontrol analysis of Reserve Bank of India data shows that outward remittances under the LRS totalled about $26.4 billion in FY26 (up to February), with overseas travel accounting for $15.34 billion, or 58% of the total.
The next-largest categories were maintenance of close relatives ($3.15 billion), gifts ($2.30 billion) and investments in overseas equity and debt ($2.21 billion). The investment category, which includes purchases of foreign stocks and bonds, rose 59% in FY26, highlighting growing interest among Indian investors in global assets.
Remittances for the purchase of immovable property abroad surged 76.4%, rising to $490 million in FY26 from $278 million in FY25. This suggests households are increasingly using the LRS not just for consumption, but also for geographic diversification of wealth and exposure to international real estate.
The share of investment in total outward remittance rose to 8.4 percent in FY26 from 2.2 percent prior to the pandemic. Meanwhile, immovable property now accounts for 1.9 percent of money spent outside compared with 0.4 percent in FY20.
Education remittances, however, have already come under pressure. Transfers for overseas studies fell to $2.16 billion in FY26, down 21.8% from $2.76 billion in FY25 and less than half the post-pandemic peak of $4.96 billion in FY22. Education’s share in total remittances has declined from 28.1% in FY22 to just 8.2% in FY26.
The decline reflects a combination of rupee depreciation, rising tuition costs and tighter immigration rules in major study destinations. Any further restrictions under the LRS could therefore disproportionately affect students and families already facing higher overseas education costs.
While travel remittances declined 3.1% in FY26 after several years of rapid growth, they remain by far the dominant category.
The composition of outward remittances has changed significantly over time. In FY12, education and family maintenance were the primary uses of the scheme. Today, travel, international investing and overseas property purchases account for a much larger share.