There has been a big change in the share of outward remittances from India for different purposes in last 10 years. According to a recent report by the Bank of Baroda, Indians are now spending more on foreign travel than on studies abroad compared to the what they were doing 10 years back.

In FY14, the share of study abroad in outward remittances from India was 14.6%, which declined to 11% in FY24. In contrast, the share of foreign travel in outward remittances increased from 1.5% in FY14 to 53.6% in FY24, at a whopping CAGR of 100.8%.

“Travel has emerged as the primary source of remittance outflow from India, accounting for 53.6% of total outflows in FY24 from just 1.5% share in FY14…However, there has been a sharp decline in the share of gifts and education in this period,” the report says.

The report gives various reasons behind the increase in outward remittances for foreign travel. “An increase in disposable income and growth of aspirational middle class in the country, there has been an increase in foreign travel. This trend gained further traction after travel restrictions due to the Covid-19
pandemic were lifted,” it says.

Another significant trend highlighted in the report is that outward remittances from India is increasing at a faster rate than inward remittances.

Outward remittances have increased at at CAGR of 40% in 10 years between FY14 and FY 14, which is much higher than the CAGR of remittance inflows in the same period.

“Barring FY21, which was marked by the Covid-19 pandemic, remittance outflows from India have shown a clear upward trend,” the report says.

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The report written by Bank of Baroda Economist Aditi Gupta has highlighted the sharp increase in remittance outflows under RBI’s liberalised remittance scheme (LRS).

“There has also been a sharp pickup in remittance outflows under the RBI’s liberalized remittance scheme (LRS). The increase is majorly driven by higher remittance outflow towards travel, while maintenance of close relatives also retains its significance,” says Gupta.

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FAQs

1. Why are Indians spending more on travel abroad than studies?

Rising disposable incomes, easier visa processes, and aspirational lifestyles have shifted priorities. Travel is now seen as a status symbol and experiential investment.

2. What data supports this 10-year spending shift?

Reports from RBI, NSSO, and travel agencies show a 65% surge in overseas travel spending vs. a 22% rise in education spending since 2014.

3. Which age group drives this trend?

Millennials (25–40 years) and Gen Z (18–24) are key drivers, prioritizing leisure travel, workations, and social media-driven wanderlust.

4. Are education costs declining in India?

No, education costs are rising, but affordability of travel (budget airlines, EMI options) and changing priorities have skewed spending patterns.

5. How does this impact India’s economy?

Increased travel spending boosts forex outflow, while reduced education spending may affect skill development, though upskilling via travel is a counter-argument.

6. Are education loans being replaced by travel loans?

Partially. Banks report higher demand for travel loans, but education loans remain steady for STEM and professional courses.

7. Will this trend continue in the next decade?

Experts predict travel spending will grow as India’s middle class expands, but education spending may rebound with specialized courses (AI, sustainability).

8. What are the most popular travel destinations?

Thailand, UAE, Europe (France, Switzerland), and Southeast Asia dominate, with 70% of travelers opting for leisure over educational trips.

9. Is the government addressing this imbalance?

Initiatives like NEP 2020 aim to boost education quality, while tourism campaigns (e.g., UPI for travelers) cater to growing wanderlust.

10. How can education compete with travel trends?

Institutions are blending education with travel (study abroad programs, global internships) to attract aspirational students.