As Indian students fuel the global education economy, outdated forex and remittance rules are adding unnecessary financial stress. A student-first rethink could ease access, improve transparency, and strengthen India’s global talent pipeline.
India is one of the world’s largest contributors to the global education economy, with students spending over USD 3.5 billion annually on overseas tuition and living costs. Yet, the forex framework governing education remittances has grown increasingly complex, costly, and misaligned with how global education actually works.
Under current rules, overseas education is treated as discretionary spending under the Liberalized Remittance Scheme, attracting tax collection at source and layered compliance. For students, this creates a liquidity shock: fees are time-bound, currency risks are real, and refunds arrive long after academic timelines move on. The result is not reduced demand, but heightened financial pressure on families, especially those relying on savings or education loans.
The framework also distorts behavior. Similar payments attract different tax treatment depending on whether they are made via bank transfers, forex cards, or credit cards, creating confusion rather than compliance.
Globally, countries are competing for students not just on university rankings, but on ease of financing and predictability of costs. A student-first forex approach would recognize education as human capital investment, simplify remittances, ensure instrument neutrality, and reduce upfront cash strain.
Investing in students is ultimately investing in India’s long-term economic and innovation future.
