How West Asia war and falling rupee are reshaping Indians’ overseas spending and study abroad budget

According to Reserve Bank of India data cited by PTI, overseas travel spending by Indians under the Liberalised Remittance Scheme fell to $1.09 billion in March 2026, down from $1.3 billion in February and $1.65 billion in January. 

Total outward remittances under the LRS stood at $2.59 billion in March, with travel remaining the largest share. The shift comes at a time when the rupee has been under sustained pressure due to higher crude oil prices, foreign capital outflows and uncertainty around the West Asia conflict. 

The rupee hit a record low of 96.96 per US dollar last week, according to Reuters, before recovering partly. The publicly available mid-market USD-INR rate at the time of publishing this article stood near Rs 95.63 per dollar as per Morningstar.

Larger picture revealed by RBI data 

Under the Liberalised Remittance Scheme, resident individuals, including minors, can remit up to $250,000 per financial year for permitted current and capital account transactions, including travel, education, maintenance of relatives abroad and investments.

In March, Indians spent $623.05 million under the “other travel” category, which includes holiday trips and international credit card settlements. This was nearly 57% of the total travel outgo of $1.09 billion. 

Education-related travel, including fees and hostel expenses, stood at $450.16 million, while business travel, pilgrimage and medical treatment together accounted for $21.39 million, according to the RBI data.

The separate “studies abroad” category, which includes payments for foreign education services taken remotely, such as correspondence courses, fell to $151.71 million in March from $175.68 million in February and $267.42 million in January.

The data also showed that remittances for maintenance of close relatives abroad rose to $389.78 million in March from $266.18 million in February. 

Spending under “studies abroad”, which includes education services available remotely without physical travel, fell to $151.71 million in March, compared with $175.68 million in February and $267.42 million in January.

For the full financial year 2024-25, outward remittances under LRS stood at $29.56 billion, with travel accounting for the largest share at $16.96 billion, according to the same data.

Why a falling rupee matters for Indians studying abroad and travellers

A weaker rupee immediately raises the cost of almost every major dollar-denominated expense for Indian students abroad and travellers alike. 

Air tickets, hotel bookings, tuition fees, rent, hostel costs and overseas credit card bills all become more expensive when the rupee falls against the dollar. 

Recent public reports quoting education consultants and loan platforms have noted that the rupee’s depreciation, higher living costs and tighter visa rules in major destinations such as the US, UK, Canada and Australia are forcing some Indian students to rethink timelines, destinations or loan sizes.

The Economic Times reported last month that currency depreciation and global tuition inflation together could raise overseas education costs by 7-11% annually in rupee terms.

The March LRS data reflects this stress. Education-related travel was still a large component at $450.16 million, but “studies abroad” remittances fell sequentially for the second month. 

This does not necessarily mean demand for foreign education has reduced substantially; it more so suggests that families are becoming more cautious about when and how much they remit.

For travellers, the hit is more immediate. A family holiday abroad becomes costlier not only because of the exchange rate but also because oil prices can push up airfares. This explains why discretionary foreign travel is among the first areas where households may cut back.

The West Asia conflict has added another layer of pressure by keeping crude oil prices elevated. As per experts quoted by Reuters, the rupee’s slide was driven by oil prices near $110 per barrel, higher US yields and concerns over India’s external balances, as India remains heavily dependent on imported crude.

For India, lower discretionary foreign travel can reduce foreign exchange outgo. But the relief is only partial because the same conflict that discourages travel also raises the import bill through costlier oil, putting fresh pressure on the currency.

Against this backdrop, Prime Minister Narendra Modi has also urged people to avoid unnecessary foreign travel, gold purchase, conserve fuel and adopt measures such as carpooling and Working From Home to promote conscious consumption of energy amidst a global crisis.

The appeal ties into a larger concern: India is a major oil importer, and higher crude prices directly add pressure on the rupee.

Remittances: A cushion, but with a Gulf risk

The rupee’s fall has a mixed impact on remittances. For families receiving money from abroad, a weaker rupee increases the rupee value of each dollar, dirham or riyal sent home. 

While a recent PTI report argues that this slight float offered can cushion household spending in states with large migrant populations, the current war situation creates a separate risk  employment and income disruption for Indian workers in the Gulf. 

Reuters reported that the conflict has hit India’s job and remittance channels, with more than 9 million Indians working in the Gulf and economists warning that a prolonged war could hurt remittance flows and export-linked jobs.

India remains one of the world’s largest recipients of remittances. The Economic Survey 2025-26 said India received $135.4 billion in remittances in FY25, helping support the current account despite the merchandise trade deficit.

This is why the remittance channel is important in the current crisis. Inward remittances support the rupee and household consumption, but a slowdown in Gulf jobs or delays in salary payments could hurt families even as the exchange rate temporarily makes each remitted dollar more valuable.

The foreign exchange pressure also formed the backdrop to US Secretary of State Marco Rubio’s ongoing India visit. Rubio met Prime Minister Modi and External Affairs Minister S Jaishankar in New Delhi earlier this week. 

As per reports published by PTI,  discussion between both sides transpired around issues concerning West Asia, trade, maritime security and energy cooperation. 

During the meeting, Rubio also cited progress on efforts related to the Iran conflict and the Strait of Hormuz, while Jaishankar underlined India’s interest in safe maritime navigation and early progress on a bilateral trade deal.

India is also hosting the Quad foreign ministers’ meeting on May 26, with Rubio joining the foreign ministers of Australia and Japan in New Delhi, according to the Ministry of External Affairs.

What it means for Indian households

For Indian households, the war is not just a geopolitical headline. It is visible in the cost of a foreign vacation, the loan size needed for an overseas degree, the rupee value of money sent by relatives abroad and the uncertainty facing Indian workers in West Asia.

The fall in travel outgo to $1.09 billion in March shows discretionary foreign spending is already adjusting. For families, the immediate takeaway is simple: any overseas plan now needs a larger currency buffer than it did a year ago.