In FY25, outward remittances under the Liberalised Remittance Scheme (LRS) for studying abroad fell 16 per cent to $2.91 billion compared with the previous year. Remittances for education have been steadily declining since the Covid peak of $5.16 billion recorded in FY22. This sustained drop reflects changing financial strategies, shifting destination preferences and a recalibrated approach by Indian families towards international education.
Overall remittances under the LRS were growing strongly between FY22 and FY24, but recorded a 7 per cent decline in FY25.
LRS is a scheme introduced by the Reserve Bank of India that allows resident individuals to remit up to $250,000 per financial year for permissible current or capital account transactions, including education, travel, investment and maintenance of relatives abroad.
Studying abroad
According to Akshay Chaturvedi, Founder and CEO, Leverage Edu, several converging factors are driving this decline. “There’s a clear shift in how Indian students are financing their education abroad, more are opting for local loans and scholarships in destination countries, which reduces the need for large upfront remittances.” He also pointed to increased strategic planning by families in response to rupee volatility and visa delays in key countries like the US and Canada.
The shift is also reflected in destination trends. In 2024, Indian student numbers in traditional education hubs like Canada, the US, and the UK declined significantly. Canada saw a dramatic fall from 233,532 students in 2023 to 137,608 in 2024. Meanwhile, countries such as Germany, Russia and Bangladesh reported increasing Indian student inflows.
“Indian students today are far more outcome-oriented, they’re looking closely at affordability, post-study work pathways and long-term visa clarity… This isn’t a rejection of traditional destinations, but a reflection of how the idea of ‘value’ in global education is being redefined,” Chaturvedi added.
Going forward
Despite improvements in domestic higher education, experts believe that the aspiration to study abroad remains robust. Studying abroad is no longer viewed solely as an academic pursuit but as a pathway to global exposure, multicultural networks and long-term immigration opportunities. While domestic education options are improving in quality, they are not replacing international education, instead, they are contributing to a more competitive and thoughtful decision-making process for students and families.
Interestingly, while education-related remittances decline, other categories under LRS, such as travel ($16.96 billion), investments in equity/debt ($1.70 billion) and property purchases ($322 billion) have seen a surge.
“The focus has shifted to investment…There is increased focus on diversification of investment across geographies and asset classes,” pointed out Riaz Thingna, Partner, Grant Thornton Bharat.
Published on May 27, 2025
