Overseas travel accounted for over half of outward remittances in FY2024, a sharp increase in a decade fuelled by rise in disposable income and aspirational middle class, Bank of Baroda said in its latest research.
The travel segment accounted for a miniscule 1.5 per cent of $ 1.1 billion outflow in FY2014 and its contribution surged to $ 17 billion in FY2024. This was 53.6 per cent of the $31.7 billion remitted by Indians last fiscal.
Overseas travel gained further traction with the lifting of Covid-19 pandemic restrictions, Bank of Baroda's economist Aditi Gupta said in a report on Saturday.
Remittances towards maintenance of close relatives, gifts and overseas education were the other top categories for foreign spending by Indians.
Outward remittances rise
On a year-on-year basis, outward remittances grew 17 per cent to $31.7 billion in FY 2024, according to the Reserve Bank of India. International air traffic handled by Indian airports rose 22 per cent to over 69 million during the same period.
Rising air connectivity and liberal visa norms too are encouraging foreign travel.
McKinsey & Co estimates overseas trips of Indians will grow from 13 million in 2022 to 80 million in 2040.
According to aviation consultancy CAPA India, the Indian leisure outbound traffic could potentially grow to 28.1 million by 2030 up from 8.3 million in 2019. "International leisure expenditure would increase to $65-75 billion from the current $16-18 billion of which 20 per cent will be expense on airfares," CAPA India said in a briefing last November.