Fall in outward remittances good news for India's current account
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Synopsis
This is the first time annual remittance outflows contracted since 2015 when the Reserve Bank of India (RBI) doubled the annual limit for sending money abroad to $250,000 and allowed more current account transactions under the Liberalised Remittance Scheme (LRS).
Agencies
Total outflows contracted 32% in FY21 as major heads like travel, overseas studies and maintenance of close relatives saw a sharp dip. But outflows under permissible capital account transactions like investment in overseas deposits picked up.
India’s outward remittances fell by as much as $6 billion in FY21 as the pandemic put brakes on ordinary overseas travel and student traffic to campuses abroad, partly contributing to the current account surplus of $24 billion.