A provision in Donald Trump’s expansive “One, Big, Beautiful Bill Act” has the potential to steal billions of dollars from foreign-received funds.
It suggests imposing a 3.5% tax on foreign workers’ remittances transferred overseas, including those with temporary visas like H-1Bs and green cards. Experts believe the ramifications would be severe for India, the largest beneficiary of remittances worldwide. Mexico, China, the Philippines, France, Pakistan, and Bangladesh are among the other top receivers.
According to a study by analysts from the Reserve Bank of India (RBI), Indians living overseas sent home $119 billion (£88 billion) in 2023, which was more than foreign direct investment and could cover half of India’s goods trade imbalance.
Migrant workers, many of whom already pay taxes in the United States, might be defrauded of billions of dollars by a simple fee on remittances. The probable outcome? A decline in India’s most reliable external funding source and an increase in unreported, informal financial flows.
According to the World Bank, India has maintained its position as the largest beneficiary of remittances since 2008, with its share increasing from 11% in 2001 to 14% in 2024. According to India’s central bank, remittances are predicted to continue to grow, reaching an estimated $160 billion by 2029. Since 2000, the nation’s remittances have continuously been at or near 3% of GDP.
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