Reserve Bank of India data has revealed a continued slowdown in overseas travel spending by Indian residents, with outward remittances for international travel and tourism declining to USD 1.09 billion in March 2026, reflecting weaker outbound travel demand and changing spending patterns among Indian travellers.
The latest figures, released under the Liberalised Remittance Scheme (LRS), show that travel-related remittances fell by USD 212.43 million compared with February 2026, when overseas travel spending stood at USD 1.3 billion.
The decline extends a broader trend witnessed through much of the 2025–26 financial year, during which total outward remittances for travel declined by approximately 2 percent year-on-year.
According to RBI data, total overseas travel-related remittances during the full fiscal year amounted to USD 28.98 billion, compared with USD 29.56 billion recorded during the previous financial year.
Outbound Travel Demand Shows Signs of Moderation
The March figures indicate a sustained moderation in outbound discretionary spending by Indian travellers following a period of strong international travel recovery in the years immediately after the pandemic.
Data shows that travel-related remittances had already begun softening earlier in the year, declining from USD 1.65 billion in January 2026 before falling further in February and March.
Industry analysts believe multiple factors are contributing to the slowdown, including volatile global travel conditions, rising international travel costs, currency fluctuations and evolving consumer spending priorities.
The decline also reflects changing outbound travel patterns among Indian residents, particularly students and younger travellers who traditionally account for a substantial share of international remittances.
Under the Liberalised Remittance Scheme, Indian residents are permitted to remit funds abroad for various purposes including overseas travel, maintenance of close relatives, foreign education, property purchases and international investments.
Tighter Student Visa Norms Impact Travel Outflows
One of the major factors influencing the decline in outward remittances has been the reduction in the number of Indian students travelling to key Western education destinations such as the United States, United Kingdom and Canada.
Travel industry observers note that tighter visa norms, stricter immigration policies and increasing financial requirements for international students have impacted outbound education-related travel and associated spending.
The slowdown in student mobility has also had a direct impact on remittances linked to tuition payments, accommodation and living expenses abroad.
At the same time, global geopolitical uncertainty and elevated travel costs have influenced discretionary holiday spending, particularly among middle-income outbound travellers.
The report suggests that Indian travellers are becoming increasingly cautious with international spending amid uncertain global economic conditions and rising travel expenses.
Investments and Property Purchases Continue to Rise
While travel-related remittances weakened, the RBI data showed strong growth in outward remittances linked to overseas investments and property acquisitions.
According to the central bank, outward remittances for foreign investments and overseas property purchases nearly doubled during the financial year, reflecting growing interest among affluent Indian investors in global asset diversification.
Industry experts note that wealthier Indian individuals continue to expand international investment exposure through real estate, equities and debt instruments despite moderation in consumption-linked spending categories.
The contrast highlights a broader shift in outbound financial flows, where investment-oriented remittances are increasingly outperforming discretionary travel and education spending.
Fiscal Year Witnessed Fluctuating Outbound Spending Trends
The RBI data also showed significant fluctuations in outward remittance patterns throughout the 2025–26 fiscal year.
The financial year began strongly in April 2025, when overseas remittances rose 8.6 percent year-on-year to USD 2.5 billion, supported largely by international travel demand and outbound investments.
However, momentum weakened in subsequent months.
In May 2025, remittances fell 4.4 percent year-on-year to USD 2.31 billion, while July recorded a sharper decline of 11 percent to USD 2.45 billion amid softer discretionary spending and reduced overseas education activity.
August, traditionally one of the peak periods for international student departures, witnessed an even steeper decline of 17.7 percent year-on-year, with total remittances falling to USD 2.6 billion.
Although September saw a modest recovery to USD 2.78 billion, remittances declined again in October to USD 2.36 billion and further to USD 1.94 billion in November before improving slightly to USD 2.6 billion in December.
Outbound Tourism Sector Adjusting to New Travel Dynamics
The decline in outward travel remittances comes at a time when India remains one of the world’s fastest-growing outbound tourism markets in terms of long-term potential.
However, travel industry stakeholders believe the sector is entering a more mature phase where travellers are becoming increasingly selective, experience-focused and cost-conscious.
Changing visa policies, geopolitical developments, airline capacity constraints and higher travel costs are expected to continue influencing outbound travel patterns over the near term.
Industry experts also note growing interest among Indian travellers in shorter regional trips, experiential tourism and alternative travel styles such as slow travel and sustainable tourism, potentially reshaping future outbound spending trends.
Despite the recent moderation, analysts expect India’s outbound travel market to remain one of the most significant global growth drivers over the coming decade due to rising disposable incomes, expanding international connectivity and increasing global travel aspirations among Indian consumers.
