Good morning [%first_name |Dear Reader%],

The way Indians spend money abroad has been in the spotlight the whole of this year. First the regulator, and then the government, have acted on unfolding trends, each in their own way (and in the case of the latter, to its own benefit).

The amount of money Indians spend on travel abroad has increased sharply these past couple of years, doubling from US$522 million in November 2019 to US$1 billion in November 2022. The share of travel as a part of total outward foreign remittances under the Liberalised Remittance Scheme (LRS) has also gone up from 35% to 52% in the same period. (Talk about revenge travel!)

So the government, of course, sees a shiny new taxation toy it can play with: the LRS. 

What is the LRS, you ask? 

Well, it’s the scheme that allows all Indian residents, including minors, to freely remit up to US$250,000 per financial year (April-March) abroad for a variety of purposes. And it had grown by 35% since 2019 to nearly US$2 billion a month as of November last year. 

Remittances were getting easier.