In recent days, two changes in rules have contributed to increased costs for Indian travelers. The first came as part of the budget and affects those seeking to exchange Indian rupees for foreign currency. Previously, individuals exchanging less than ₹50,000 were able to do so without any paperwork—but now, regardless of the amount being exchanged, individuals must submit certain documentation. This will likely create headaches for both travelers and money changers alike.
The second change has to do with the Reserve Bank of India (RBI) and credit card companies’ decision to limit the amount of money that can be spent on foreign websites using an Indian credit card. Specifically, the RBI has instructed banks to enforce a cap of just $40 per credit card per year for transactions taking place on non-Indian websites. The effects of this measure could be especially significant for those who have become accustomed to using Indian cards for online purchases of things like flights, hotels, and shopping.
The impact of these changes is one of the biggest concerns facing the travel industry in India. According to Kaushal, international travel is already a pricey proposition for most Indian travelers, thanks to high airfares, currency exchange rates, and other costs. These new measures could put a serious damper on vacation plans. In particular, the credit card limit could be a major hurdle for travelers who value the convenience of online booking.
MakeMyTrip’s Kabra agrees with this sentiment, arguing that the move will make it much harder to book travel arrangements online. He predicts that many customers will instead turn to cash or other methods of payment—although this could create further challenges. Travelers using cash may find it difficult to convert Indian rupees into foreign currency, especially now that more documentation is required. As for the impact of these changes on retailers, Kabra believes that we will see a shift to domestic spending rather than overseas shopping.
To help offset some of the impact of these rule changes, Kabra advises travelers to book their travel arrangements as early as possible and to consider alternate forms of payment. Additionally, he notes that voucher schemes and other promotions could become more popular in the wake of these changes. Finally, Kabra suggests that the government should do more to promote travel and tourism within India, creating more opportunities for domestic spending.
Ultimately, it remains to be seen how these changes will affect travelers and the travel industry as a whole. Some may view them as a necessary measure to protect India’s foreign exchange reserves, while others will see them as an unwelcome burden on those who seek to explore the world. Regardless, the latest moves have certainly created a more uncertain environment for anyone planning a vacation or booking travel online.