Recent changes to student visa regulations and stricter income verification requirements in several countries are affecting Indian students studying abroad, leading to a notable decline in education-related remittances from India.
Data from the Reserve Bank of India (RBI) reveals a significant drop in funds sent abroad by Indian students. In 2025, remittances for overseas education fell sharply from $368.21 million in January to $182.17 million in February—a nearly 50% month-on-month decrease. On an annual basis, education remittances dropped almost 16%, from $3.48 billion in the previous fiscal year to $2.92 billion in 2025.
Experts suggest this decline may be temporary but signals a longer-term shift in student remittance patterns due to regulatory, financial, and systemic changes. Professor Chris R. Glass of Boston College notes that the number of Indian students in the United States—the most popular destination for Indian higher education—fell by 28% between March 2024 and March 2025.
According to Pavan Kavad, Managing Director of Prithvi Exchange, the steep decrease under India’s Liberalized Remittance Scheme (LRS) reflects “a complex interplay between short-term interruptions and potential structural shifts.” Kavad points to tightened visa policies in key destinations like Canada, the UK, and Australia, which have reduced Indian student study permits by approximately 25%.
Changes in non-immigrant visa rules—including higher income proof requirements and restrictions on dependent family members’ stay—are influencing Indian students’ decisions. Many are reconsidering studying abroad amid growing visa uncertainties.
Indian residents are subject to RBI’s LRS, which caps foreign remittances at $250,000 per financial year per individual. Additionally, a 5% tax collection at source (TCS) applies on education-related remittances exceeding ₹700,000, with a reduced 0.5% rate for amounts covered by education loans. Recent budget adjustments have raised the TCS threshold from ₹700,000 to ₹1,000,000 starting April 2025, potentially easing tax burdens.
Despite these hurdles, India’s overseas student population continues to grow, reaching an estimated 1.3 million in 2024. The U.S. remains the top destination, with 268,923 Indian students enrolled in the 2022–23 academic year—a 35% increase.
According to UpGrad, annual education expenses for Indian students in the U.S. range from $25,000 to $55,000 (approximately ₹2.07 million to ₹4.56 million), covering tuition, living costs, and other fees. While top universities charge about $50,000 in tuition yearly, living expenses can add up to ₹885,000.
Kavad cautions that although the recent dip in remittances may be temporary, evolving regulations and economic factors are poised to cause lasting changes in the pattern of funds flowing from India to support overseas education.
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