Indian travelers are spending more on international travel than ever before, reaching a new peak in overseas spending. According to data from India’s central bank, Indians spent $31.7 billion overseas under the Liberalised Remittance Scheme in fiscal 2024, with more than half of that amount being spent on international travel. This resurgence comes after a sharp decline in 2021 due to the pandemic, with international travel spending plummeting to $3.2 billion for Indians. The implementation of the Tax Collected at Source (TCS) in October 2023 has impacted monthly average spending, with a decrease from $1.5 billion to $1.3 billion between October 2023 and March 2024.
An earlier joint report by Booking.com and McKinsey projected that Indians could become the fourth-largest global travel spenders by 2030, with travel spending expected to rise from $150 billion in 2019 to $410 billion by 2030. Outbound trips for Indians currently account for only 1% of total trips, but contribute significantly to total expenditure, a figure anticipated to grow to 35% in the next decade. The American Express Travel’s global travel trends report also indicates that Indians plan to increase their travel spending. The first quarter of 2024 saw 97 million passengers traveling through Indian airports for both international and domestic trips, a significant increase from a decade ago.
The rising middle class in India, with growing incomes, bodes well for the travel industry. The Mastercard report projects that India will add over 20 million middle-class individuals and nearly 2 million high-income earners over the next five years. Skift Megatrends highlighted India’s middle class, which currently makes up 31% of the population and is expected to rise to 38% by 2031 and 60% by 2047. Additionally, 65% of India’s population is under 35 years old, and by the middle of this century, India is expected to have a middle-class population of around 1 billion.
Indian travel trends also show growth in international destinations. As of March 2024, Indian passenger arrivals into the U.S. were 59% above 2019 levels, outperforming the overall recovery of overseas visitors to the U.S. Travel to Japan surged by 53% in March 2024 compared to 2019, and the number of flights from India to Vietnam saw a significant increase of 248% in March 2024 compared to the same month in 2019. These trends indicate a growing interest in international travel among Indian travelers, with a focus on a variety of destinations.
Overall, the data highlights the significant increase in overseas spending by Indian travelers, with a large portion of that being allocated to international travel. The implementation of the Tax Collected at Source has impacted monthly spending, but Indian travelers are adjusting to the new rules. With projections showing Indians becoming one of the top global travel spenders by 2030, the rising middle class in India and the increasing number of high-income earners are expected to drive further growth in the travel industry. Additionally, the growth in international destinations shows a diverse range of travel interests among Indian travelers, with a focus on popular destinations such as the U.S., Japan, and Vietnam.
