Trump's Proposed Tax on Remittances: A Financial Jolt for Indian Expats

President Donald Trump's proposed 5% tax on outward remittances could significantly increase costs for Indians in the US, impacting financial aid sent back home. With India's remittances reaching USD 118.7 billion in 2023-24, the US holds the largest share. Reducing transaction costs remains a global policy focus.

President Donald Trump's proposed 5% excise tax on outward remittances could financially impact Indians residing in the United States, potentially costing them over USD 1.6 billion annually. This tax is part of a new bill targeting more than 40 million people, excluding US citizens.

According to the Reserve Bank of India's March Bulletin, remittances sent to India have surged from USD 55.6 billion in 2010-11 to USD 118.7 billion in 2023-24. The US has been the most significant contributor, accounting for 27.7% of total remittances, translating to approximately USD 32.9 billion.

This proposed tax adds to the fees and exchange rate conversions already burdening remittance transactions. Despite these financial challenges, India remains the top global recipient of remittances, underscoring the crucial role they play in supporting families and sustaining economic stability.

(With inputs from agencies.)