Trump’s Big Beautiful Bill Impact on Indians

With US President Donald Trump’s massive legislation about government spending being cleared, discussion on how it could impact the Indians has been initiated among the NRIs. For India, the most visible and direct impact will be on remittances, the money sent to or invested in India by the NRIs. That apart, migration is another area that is likely to be affected. Now, let us understand how it would impact the Indians.

In the final draft of the ‘big, beautiful bill’, the tax on remittances sent from US to foreign nations was cut down to 1% against the initially proposed 5%. The slash in the remittance tax offers a significant relief to about 4.5 million Indians in the US. The tax will be applicable to US residents who aren’t citizens, including Green Card holders, H1-B and H-2A visa holders, and international students too.

The tax will apply to transfer of money through cash, money orders, or cashier’s checks. However, transfers made from financial institutions or funded through US-issued debit/credit cards will be exempted. Those using a ‘qualified remittance transfer service’ will also be exempt.

Remittances are a major source of foreign income for India, providing financial aid to millions of families and also bolstering the economy. In 2023-24, India received a record $129 billion in remittances, the highest in the world, with over 28 per cent coming from the US alone, according to the World Bank data.

During the same period, India also accounted for 14.3 per cent of global remittance flows, more than any other country in the 21st century. In states like Kerala, Uttar Pradesh, and Bihar, remittances form an important part of their everyday survival.

One other key which would be affected is immigration. The bill has earmarked billions of additional funds towards immigration-control and national security efforts, to enable carry out the largest mass deportation operation in American history, as vowed by Trump. According to reports, the US is said to have identified over 18,000 Indian nationals who entered into the country illegally.

Trump’s bill raises the costs for even those trying to stay in the US legally too. The new legislation has increased the fees for work permits, asylum applications and other humanitarian protections. The cuts to medical aid and other government safety-net programmes will also have an impact on immigrants and low-income groups.

These are the areas where Trump’s bill would have an immediate impact.