(MENAFN- The Arabian Post)
By Nantoo Banerjee
Indians are travelling abroad like never before. Last year, over 30 million Indians travelled abroad, mostly on leisure trips. The number is nearly 15 percent more than that in 2023. The total expenditure rose by 25 percent. Rich and upper middle-class Indians are also increasingly sending their children for foreign studies. Over 1.33 million Indian students are currently pursuing education abroad. Some Indians are going for groovy overseas sites for weddings. Inviting international celebrities to attend marriage ceremonies in India has become trendy. Lavish foreign exchange expenditure is a non-issue for this class of Indians. The Reserve Bank's Liberalised Remittance Scheme allows Indian residents to send up to $250,000 abroad per year without prior RBI approval. Rapid fall of Indian Rupee (INR) vis-à-vis other popular foreign currencies such as US$, Euro, Singapore$, British Pound, Swiss Franc, and Japanese Yen in recent years had little impact on foreign spending by the fund flush Indian upper class.
The INR has been constantly under pressure on account of large trade deficits year after year and domestic inflation. However, they do not seem to concern the government and the Indian upper class. Indian foreign tour organisers and overseas universities are having a great time marketing their products. Few took the recent comments on the trend by India's Vice President Jagdish Dhankar himself seriously, terming the rising practice of Indian students pursuing foreign education“a disease that contributes a $6-billion forex drain.” Dhankar was, however, silent on growing leisure trips abroad by cash rich Indians and other activities causing massive foreign exchange drain. Maybe, he did not want to be the part of growing controversy over record breaking annual foreign trips by politicians in power funded by the national and state exchequers. Uninformed critics cite the instance of Prime Minister Narendra Modi himself making 84 foreign trips, visiting 73 countries - several of them repeatedly - in less than 11 years in office, ignoring the excellent outcome of most such tours improving bilateral relations and marketing India abroad to invite more foreign direct investments.
The government does not seem to be much concerned with the little luxury of the country's rich Indians as long as it is able to borrow foreign funds to pay for growing annual trade deficits and conspicuous consumption by the rich. The country's external debt swelled to $711.8 billion at the end of September 2024. The external debt-to-GDP ratio was 19.4 percent in September 2024. The US dollar was the largest component of India's external debt, making up 53.4 percent of the total at the end of September 2024. The ratio of short-term debt to foreign exchange reserves was 20.3 percent at the end of June 2024. However, some pro-government economists say India's debt burden is much lower than countries such as the USA and Japan, dismissing the fact that given the country's vast low-income, undernourished population, its debt burden is just not comparable with those of highly developed countries.
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In fact, the poor country's rich citizens are living a whale of a life, splurging the nation's hard-earned foreign exchange in overseas leisure travel, useless foreign education in second or third rated institutions and jazzy weddings abroad and at home. The wedding of Anant Ambani and Radhika Merchant last year had reportedly cost around Rs 5,000 crore, or about US$600 million – more than the GDPs of countries such as Micronesia, Marshall Islands, Kiribati, and Dominica. It was one of the world's most expensive wedding extravaganza ever. The pre-wedding festivities included a luxurious cruise, private jets, and security, featuring performances by highly expensive global stars, including Rihanna and Justin Bieber. The Anant-Radhika marriage ceremony cost much more than other famous weddings across the world, including the wedding of Princess Diana and Prince Charles in 1981, which cost about US$48 million. The actual foreign exchange cost of the Ambani wedding remains unknown.
Indian travel companies are doing a brisk business. They are geared up to organise group travels starting with low-cost countries such as Thailand, Singapore, Malaysia, Vietnam and Indonesia (mostly Bali) to high-cost Europe, Japan, the USA, Canada and South America. The message is:“Bag Bharo, Nikal Pado, Chalo Bindas!” One travel firm offers a 13-day Antarctica trip for as much as Rs. 13.25 lakh each. A 21-day South America trip could cost a group traveller Rs.10.85 lakh. A nine-day Spitsbergen Arctic Cruise could cost Rs.8.75 lakh each. It seems some of the Indian travel firm executives are actually working 90 hours a week to make the best of India's foreign travel boom. Generally mild-mannered, deep-pocket Indian foreign travellers are welcome in most countries.
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For Indian travellers, the United States remains among the most favoured foreign destinations. The country also has the largest number of wealthy Indian settlers. The US Mission to India issued more than one million non-immigrant visas for the second year in a row, including a record number of visitor visas, underscoring the huge demand of Indians for travel to the United States for tourism, business, and education. In the past four years, the number of visitors from India have increased by five times, and more than two million Indians travelled to the United States in the first eleven months of 2024, a 26 percent increase over the same period in 2023. Over five million Indians already have a non-immigrant visa to visit the United States and each day the Mission issues thousands more.
According to the World Inequality Report 2022, the number of India's highly affluent elite is only around 14 million. However, the size of the fast-growing upper middle class would be over 20 times this number. A large number of them are deeply connected with some of the 15.85 million non-resident Indians living abroad. The rising disposable income and the growth of the middle class seem to be behind the fast-changing lifestyle of the nouveau riche. They are also spending big. In the last fiscal year, they spent $17 billion on overseas travel, a record 25 percent increase over the previous fiscal. The trend continues. The falling value of INR and the rising exchange cost of popular foreign currencies have failed to affect their inspiring lifestyle. (IPA Service )
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