Indian immigrants in the U.S. could lose nearly ₹10,000 crore (approx. $1.2 billion) annually due to a proposed 3.5% remittance tax introduced by the Trump administration.
The tax would apply to money transfers sent abroad by foreign workers, including H-1B visa holders, green card holders, and international students.
India is expected to be among the hardest-hit nations.
According to World Bank data, Indians abroad sent $119 billion home in 2023, with nearly $33 billion (27.7%) coming from the U.S. That translates to roughly ₹2.75 lakh crore annually.
Under the proposed tax, 3.5% of this — around ₹10,000 crore — would be siphoned off by the U.S. government.
For individuals, this means every ₹1 lakh remitted would deliver only ₹96,500 to an Indian bank account, excluding additional fees. The impact would be widespread, with over 5 million Indians living in the U.S.
Remittances are crucial to India’s economy, financing nearly half of the merchandise trade deficit and surpassing inward FDI flows. A potential 10% decline in U.S. remittances could result in a $3–4 billion shortfall for India.
Globally, India, Mexico, China, and Vietnam are expected to suffer the most under the new policy, according to the Center for Global Development.
