US EditionDonald Trump: Why a Proposed Remittance Tax by US Could Hurt India
- In 2025, Donald Trump is promoting the "One, Big, Beautiful Bill Act," which includes a provision to levy a 3.5% charge on money that green card holders and visa workers in the US transfer to other countries.
- This bill follows concerns over remittance flows, as India remains the top global recipient of such funds, receiving $119bn in 2023 and $129bn in 2024, supporting its economy significantly.
- Experts warn that the tax could reduce remittances by 10-15%, costing India $12-18bn annually and risking pressure on the rupee and household budgets, especially in states like Kerala, Uttar Pradesh, and Bihar.
- Ajay Srivastava of GTRI states the tax could 'hit household consumption hard,' while the Center for Global Development highlights possible sharp cuts in formal transfers pending Senate approval and presidential signature.
- Economist Dilip Ratha notes migrants may shift to informal channels like hawala or hand-carrying to avoid the tax, which may not reduce remittance flows but could increase unregulated transfers affecting transparency.
19 Articles
19 Articles
How Trump's 'Big, Beautiful Bill' Impacts Funds Transferred To India
In Donald Trump's "One Big Beautiful Bill," recently pushed through the House of Representatives, lies a provision that could change global remittance flows, and India, the world's leading recipient of remittances, could be impacted the most.
Budget Bill’s Tax on Remittances Is Poorly Designed and Drafted
On May 22, the House of Representatives passed the 1038-page budget reconciliation bill. The bill includes, among other questionable tax and spending policies, a poorly designed and drafted remittances tax. The bill would tax certain remittances sent from the United States (including the US possessions) to foreign countries, starting January 1, 2026. The original bill featured a five percent tax rate, but an amendment lowered the rate to 3.5 per…
Reforma
eldiariodechihuahua.mxSenators who traveled to the United States to avoid a remittance tax met with Ambassador Esteban Moctezuma to fine-tune meeting schedules.
Mexican senators from Morena and allies will now insist with their U.S. peers that the initiative to tax remittances, which went from 5 to 3.5 percent, should not be implemented.The commission, which will be headed by Roberto Velasco, head of the Unit for North America of the Foreign Affairs Secretariat, will begin talks with the Republican Party of the United States on Wednesday, June 4.“Following the instructions of President Claudia Sheinbaum…
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