Cafemutual’s analysis shows that while Indians are investing abroad more than ever under LRS, their share of total remittances has dropped sharply as travel, education, and family support now dominate outward flows.
Latest Reserve Bank of India data shows that between January and September, LRS investments in real estate grew 80% to $350 million, while remittances into equity and debt instruments rose over 50% to $1.68 billion
Many real estate firms have started to offer financing options for foreign properties, which is not permitted under FEMA rules, say experts
Based on the pace of growth, the figure could approach USD 2.5 billion in medium term, says Mihir Shirgaonkar, Vice President, Alternative Investments at Phillip Ventures IFSC.
Indian investors can easily invest in Nvidia, Tesla, and other US stocks through the Liberalised Remittance Scheme.
Currently, spends via debit cards, forex cards, or any other payment mode attract 20 percent TCS once they cross the Rs 7 lakh per person per financial year limit, but those via credit cards are exempt.
Between FY18 and FY21, overseas travel spending ranged from $4 billion to $6 billion annually. It sharply increased in FY22 to $7 billion and $13.6 billion in FY23
Sources said to CNBC-TV18 that credit card networks, banks and authorised dealers are gearing up for this eventuality and once systems are in place to account for individual forex remittances via credit cards, an implementation date will be considered.
Om Ahuja of Jones Lang LaSalle (JLL) India says that the steps taken by the Reserve Bank of India (RBI) on Indians investing in properties abroad under liberalised remittance scheme (LRS) is a dampener for Indian investors.