As per an RBI data, outward or outbound remittances by Indians for the January month scaled to a new high of $1.2 billion. On a cumulative basis, for the first 10 months of the current FY, the outflows totaled to $8.17 billion in comparison to $4.6 billion in the corresponding period in the year ago period.
The record remittances were for a varied purposes including funding of children's education abroad, for travel related expenditure or sent as gifts or money to relatives abroad.
The rules for sending money or remittance abroad by a resident Indian or NRI are covered under the Foreign Exchange Management Act (FERA). Currently, there is a cap to this overseas remittance by Indian resident at $250,000 per year. The amount can also be remitted in lieu of the some of the select investments.
Of the total flows, 90% was remitted towards gifts, travel, education and as maintenance cost for relatives overseas.
Furthermore, of the total nearly 33% of the total outward remittance is towards maintenance of relatives abroad and for gifts.
The policy for sending outward remittance eased after the foreign reserve of India crossed the historical $100 billion mark in the year 2003. Then came in the liberalized remittance scheme introduced in the year 2014 which allows all residents including minors to engaged in a forex transaction of $2,50,000 per person per financial year.