By: Shubham Ghosh
Indians are spending nearly $1 billion (£826.3 million) every month on foreign travel which is significantly more than the pre-Covid levels, reveals Reserve Bank of India (RBI) data on outward remittances.
During the April-December period of 2022-23, the outward remittances under the Liberalised Remittance Scheme (LRS) for resident individuals towards ‘travel’ was $9.95 billion (£8.2 billion).
The corresponding spending on travel during 2021-22 was $4.16 billion (£3.4 billion), and $5.4 billion (£4.4 billion) in the pre-Covid year 2019-20, according to the RBI data.
The outward remittances towards travel were $7 billion (£5.7 billion) in the entire 2021-22 financial year. “Indians are roaming across the world with their families or friends. Vietnam, Thailand, Europe, and Bali are some major destinations that Indians prefer,” said Sapan Gupta, partner, We3Online.
Europe, Indonesia, Vietnam, Thailand, and Dubai are some of the major destinations that Indians prefer. Akash Dahiya, co-founder, SanKash, said that with the rise of affordable travel and technological advancements, the travel industry is experiencing a massive boom in international destinations.
“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,” he said.
Dahiya further said travellers have become accustomed to the concept of “travel-now-pay-later” which allows them to make booking closer to the date and pick up a destination that otherwise is out of their pocket.
“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,” he added.
Meanwhile, the government in the Union Budget proposed to hike the TCS rate on overseas tour packages from the current five per cent to 20 per cent from the next fiscal. Experts are of the view that the proposal could impact overseas travel by Indians. According to RBI data, the spending on outward travel fell sharply to $3.23 billion (£2.6 billion) during 2020-21 mainly due to restrictions following the outbreak of Covid-19. The outward remittances towards travel were $6.95 billion (£5.7 billion) and $4.8 billion (£3.9 billion) in 2019-20 and 2018-19, respectively.