India has come a long way in liberalizing foreign exchange transactions for its residents. The legal framework for the administration of foreign exchange transactions in India is provided by the Foreign Exchange Management Act, 1999 (FEMA). Earlier, transferring money overseas was a cumbersome procedure involving numerous approvals from the Reserve Bank of India (RBI).
However, as India solidified its position in the global markets, open cross-border capital flow became crucial for holistic economic growth. Thus, the RBI introduced LRS for individuals to remit/spend in foreign exchange easily.