PM Modi Urges Indians to Avoid Foreign Travel as Overseas Spending Patterns Shift

Prime Minister Narendra Modi’s recent appeal to Indians to postpone foreign travel and overseas weddings for at least a year has sparked widespread discussion across the country. The appeal comes amid ongoing geopolitical tensions in West Asia and growing concerns around economic resilience and domestic spending.

However, recent data released by the Reserve Bank of India (RBI) suggests that spending by Indian tourists abroad has already been slowing down over the past two years. Instead, the sharp rise in overseas financial activity is now being driven by wealthy Indians investing in foreign properties, stocks, and debt instruments.

While addressing a public gathering in Secunderabad, Telangana, on May 10, Prime Minister Modi shared a seven-point economic support strategy aimed at strengthening India during the ongoing global and regional uncertainties.

One of the key suggestions focused on reducing non-essential foreign spending.

According to the Prime Minister, a growing trend among India’s middle class involves destination weddings, international vacations, and luxury travel abroad. He urged citizens to reconsider such spending during this sensitive period and instead prioritise domestic economic support.

The statement has drawn attention because it comes at a time when outbound tourism spending by Indians is already showing signs of decline.

The RBI’s Liberalised Remittance Scheme (LRS) data provides valuable insight into how Indians are spending money overseas.

Under the LRS framework, Indian residents are allowed to remit funds abroad for various purposes including travel, education, medical treatment, investments, and property purchases.

According to the latest figures:

• Indians spent around $26.4 billion abroad under the LRS during April 2025 to February 2026.
• This was 2.3% lower compared to the same period a year earlier.
• Foreign travel remained the largest spending category at $15.3 billion.
• However, spending on overseas travel fell by 3.1% during the same period.
• Interestingly, travel spending had already declined by around 1% in the previous financial year as well.

This indicates that overseas tourism demand from Indian travellers may already be softening due to rising costs, global uncertainty, currency pressures, and changing consumer priorities.

The slowdown is not limited to tourism alone.

RBI data also revealed that:

• Spending on gifts sent abroad contracted by 12.7% in 2025-26.
• The previous year had already recorded a sharper decline of 19.1%.

These trends suggest that discretionary overseas spending by ordinary households and middle-income families may be cooling significantly. While tourism spending is declining, another trend is growing rapidly overseas investments by high-net-worth individuals (HNIs).

The data shows a sharp increase in investments in foreign debt and equity and purchases of immovable assets such as overseas real estate.

Indian investments into foreign stocks and debt instruments rose nearly 59%, reaching $2.2 billion during April 2025 to February 2026.

For perspective:

• The same category stood at just $621 million in 2021-22.

This growth highlights the increasing interest among affluent Indians in diversifying their wealth internationally through global financial markets. Another major area of growth has been foreign real estate purchases.

According to the RBI:

• Spending on immovable assets abroad surged over 76% to approximately $490 million in 2025-26.
• In comparison, the figure was only $96.7 million during the same period in 2021-22.

This indicates rising interest in luxury homes abroad, residency-linked property investments and international real estate diversification. Countries offering investment migration programs, long-term residency options, or attractive property markets continue to attract wealthy Indian buyers.

The latest RBI data reveals an important shift in the nature of India’s outward remittances. Earlier, foreign spending was heavily associated with tourism, international education, weddings and family support.

Now, a larger share of outward money flow appears linked to asset diversification, international investing and property acquisition by affluent individuals. This transition reflects broader changes in wealth patterns and financial behaviour among India’s high-income groups.

Why the Government Is Concerned

The government’s concern likely goes beyond tourism alone.

At a time of:

• Global geopolitical tensions
• Currency volatility
• Trade uncertainties
• Pressure on foreign exchange management

Reducing unnecessary foreign spending can help:

• Retain liquidity within India
• Boost domestic industries
• Support local tourism and businesses
• Reduce pressure on outward remittance flows

PM Modi’s appeal also aligns with the broader “Vocal for Local” and domestic economic strengthening narrative promoted by the government in recent years.

If more Indians choose to delay international trips, India’s domestic tourism industry could see major gains.

Sectors likely to benefit include hotels/resorts, airlines/railways, wedding destinations within India and hospitality and local travel businesses. Popular Indian destinations such as Goa, Rajasthan, Kerala, Himachal Pradesh, Kashmir, and the Northeast may witness increased domestic demand if outbound travel slows further.

Conclusion

Prime Minister Narendra Modi’s call to postpone foreign travel has come at a time when overseas tourism spending by Indians is already declining. RBI data shows that ordinary travel and gift-related remittances are slowing, while investments in foreign assets and overseas properties are growing rapidly among wealthy Indians.

The trend highlights a significant transformation in how Indians are using international remittance channels moving away from leisure-focused spending toward global wealth diversification.

As economic uncertainty and geopolitical tensions continue, the government appears keen to encourage stronger domestic spending while closely monitoring the rising flow of capital into overseas investments and property markets.

Tags: PM Modi, Prime Minister Modi, Narendra Modi, PM Modi Avoid Foreign Travel, Overseas Spending, Avoid Gold India