Spending on foreign trips nearly doubles in FY23: RBI report

Indian Travel Spending Boom

Expenditure on foreign trips nearly doubled in FY23, thanks to a rebound in travel sector after the Covid-19 pandemic and growing cultural immersion across nations.

Overseas travel expenditures surged 97 percent to $13.7 billion in FY23 from $6.9 billion a year back, according to a report by the Reserve Bank of India (RBI).

Indians spent $6.96 billion in FY 2019-20 but the pandemic abruptly interrupted this upward trajectory and eventually dragged travel spending down to a mere $3.23 billion.

The boost in foreign travel has pushed India's forex spending to a record $27.1 billion in FY23, a jump of $7.5 billion over the previous year.

The skyrocketing travel expenditure can be attributed to a confluence of factors such as pent-up demand for travel and heightened awareness about financial instruments to fund foreign trips.

Akash Dahiya, the co-founder and chief executive of SanKash, a travel-now-pay-later fintech player that disbursed Rs 180 crore in FY23 at a monthly average growth of 20 percent, added that the lure of exploring new landscapes and connecting with diverse communities has fuelled this remarkable growth in international travel.

The RBI report on forex spending coincides with the government's recent clarification that individuals using their international cards up to Rs 7 lakh every financial year will not be subject to the limits imposed by the Liberalised Remittance Scheme. Additionally, these transactions will not be subjected to a 20 percent tax collected at source.