Outward remittances by Indians for students studying abroad crossed $1 billion in the past nine months, according to figures released by the Reserve Bank of India (RBI).
For the financial year 2015-16, outward remittances under the Liberalized Remittances Scheme (LRS) increased by nearly 200 percent. In the 11 month period between April 2015-February 2016, Indians sent $3.81 billion out of the country, the Financial Express reported, citing the RBI figures. This is approximately 187 percent more than $1.32 billion in outward remittances in 2014-15.
The outflow of remittance for the entire fiscal year is expected to cross $4 billion.
Under the LRS norms, an Indian resident can hold shares and other assets outside India without seeking approval of the central bank. The residents can withdraw a maximum amount of $2,50,000 annually. The monthly remittances in 2015-16 -- roughly $400 million per month -- have exceeded the total outflow of $440 million in 2007-2008.
About three lakh Indian students move abroad every year for studies; the U.S. remains the top destination for students for a foreign degree.
"One of the many reasons for an increase in outward remittances is definitely because more and more students are going abroad to pursue higher education and relatives maintaining them overseas by sending money. The government's move to raise the permissible limit on outward remittances from $1,25,000 to $2, 50,000 has additionally allowed people to remit outward more through the organised channels for that purpose," Kiran Shetty, managing director, South Asia, Western Union, was quoted as saying by the Financial Express.
With increasing foreign exchange reserves, the government and the RBI have allowed people to invest abroad for business and other purposes.
India's foreign exchange reserves increased by $157.4 million to reach a new high of $359.91 billion in the week that ended on April 8, 2016.