Rapid Fire
Liberalised Remittance Scheme
- 02 Jun 2025
- 2 min read
India’s outward remittances under the Liberalised Remittance Scheme (LRS) fell to USD 29.56 billion in FY2025 (USD 31.74 billion in FY2024), indicating reduced overseas spending by resident Indians due to global uncertainties, sluggish domestic income growth, and high base effect from the previous year.
- The primary cause is the 16% drop in student remittances, falling from USD 3.48 billion to USD 2.92 billion, due to stricter student visa regulations in countries like the US, UK, and Canada.
Liberalised Remittance Scheme (LRS):
- About: The LRS, introduced by the Reserve Bank of India (RBI) in 2004 with an initial limit of USD 25,000 per financial year, now permits resident individuals to remit up to USD 250,000 annually for approved current or capital account transactions.
- Eligibility: Only resident individuals are eligible. The scheme excludes corporates, Hindu Undivided Family (HUFs), partnership firms, and trusts.
- Prohibited Transactions: Purchase of lottery tickets, banned magazines, transactions with FATF non-compliant countries, gifting in foreign currency to another Indian resident's foreign account etc.
- No foreign currency accounts in India: Residents cannot open foreign currency accounts within India under LRS.
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