As per the Reserve Bank data on outward remittances, Indians are spending nearly $1 billion every month on foreign travel which is significantly more than the pre-Covid levels.
The outward remittances under the Liberalised Remittance Scheme (LRS) for resident individuals towards ‘travel’ during the April-December period of 2022-23 was $9.95 billion.
According to the RBI data, the spend on travel in the pre-Covid year 2019-20 was $5.4 billion whereas during 2021-22 was $4.16 billion.
In the entire 2021-22 financial year, the outward remittances towards travel were $7 billion.
More Indians Visiting International Destinations
Sapan Gupta, Partner, We3Online said that “Indians are roaming across the world with their families or friends. Vietnam, Thailand, Europe, and Bali are some major destinations that Indians prefer”.
Some of the major destinations preferred by the Indians include Europe, Indonesia, Vietnam, Thailand, and Dubai.
The travel industry is experiencing a massive boom in international destinations attributing to the rise of affordable travel and technological advancements said Akash Dahiya, Co-founder, SanKash.
He said “Seventy-five per cent of our portfolio is now opting for international travel. We are witnessing a surge in demand for places such as Europe, Bali, Vietnam, and Dubai among Indians”.
Also, becoming accustomed to the concept of “travel-now-pay-later” is allowing the travellers to booking closer to the date and pick up a destination that otherwise is out of their pocket.
He added that “Thus, paying for a travel experience in a monthly payment plan makes the holiday bite-size. Thus, a person looking for Goa can now go to Thailand, and a person planning for Thailand can opt for the far east and likewise”.
Repercussions of Increasing the TCS Rate
From the current 5 per cent, the government in the Union Budget proposed to hike the TCS rate on overseas tour packages to 20% from the next fiscal.
This revision of TCS rate, as per the experts, could impact overseas travel by Indians.
According to RBI data, the spending on outward travel fell sharply to $3.23 billion during 2020-21 mainly due to restrictions following the outbreak of Covid-19.
The outward remittances towards travel were $6.95 and $4.8 billion in 2019-20 and 2018-19, respectively.
