Overseas Travel Spend Declines 3% to $15.3 Billion in FY26, RBI Data Reveals

Modi's Call for Domestic Travel Leads to Moderation in Outbound Travel Spending

Prime Minister Narendra Modi's recent appeal to Indians to delay overseas travel and destination weddings by a year appears to have coincided with a moderation in outbound travel-related foreign exchange outflows. According to the Reserve Bank of India's Liberalised Remittance Scheme (LRS) data, Indians' overseas travel spending fell to $15.34 billion in April-February FY26, down 3.1 percent from the previous year's $15.84 billion.

The decline in travel spending comes at a time when the government has expressed concerns about rising outward remittances and the pressure they place on India's foreign exchange outgo, particularly under the LRS. Overseas travel remains one of the largest components of outward remittances by resident Indians. On May 10, Modi appealed to citizens to help conserve foreign exchange reserves by avoiding unnecessary foreign travel, overseas vacations, and foreign weddings and choosing domestic tourism and celebrations within India.

The moderation in travel spending in FY26 may reflect a combination of factors, including a weaker rupee, elevated international travel costs, and geopolitical uncertainty, according to experts. The slowdown also follows a sharp post-pandemic surge in overseas travel. In FY25, outbound travel remittances had remained elevated as Indians rushed to international destinations amid strong pent-up demand and easing of global mobility restrictions.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Analysts suggest that the moderation may not necessarily indicate a structural decline in outbound tourism demand but rather a normalisation after years of what is often described as "revenge tourism." The government's messaging around domestic consumption and forex conservation could increasingly influence spending behaviour among high-income households, they said.

India's foreign exchange reserves position remains comfortable overall, but policymakers have continued to closely monitor non-essential outflows amid global volatility, oil price uncertainty, and the growing pressure on the rupee. Travel industry players believe that outbound tourism demand from India remains structurally strong over the medium term, driven by rising incomes, improving passport penetration, and growing aspirational spending among affluent as well as middle-class consumers.