US Remittance Tax Will Hurt Social Security of Millions

President Donald Trump's proposed 5% tax on outward remittances under the One Big, Beautiful Bill threatens India's economic stability and progress toward the sustainable development goals (SDGs).

- Rejimon Kuttappan

This regressive move could disrupt a crucial financial lifeline for many families in India. The Indian ministry of external affairs estimates that 1.28 million NRIs and 3.18 million persons of Indian origin (PIOs) reside in the US.

According to the World Bank's 2024 Remittance Report, India remains the world's top recipient of remittances, with $129 billion in 2024.

A Reserve Bank of India report shows the US as the largest source, with its share rising from 22.9% in 2016-17 to 27.7% in 2023-24.

Let's assume that $120 billion has been remitted to India, with 27% of it coming from the US. That means around $33 billion is remitted from the US alone. Now, if a 5% tax is imposed on this amount, it would total approximately $1.6 billion (₹13,000 crore).

This is money that would otherwise have reached India but will now be lost due to the new taxation policy.

These aren't just numbers—they reflect the daily reality of Indian households that rely on remittances for survival, education, and healthcare.

Trump's proposal would cut this vital income, threatening household security in India and deepening global inequality.

Remittances are not charity; they are hard-earned income sent by migrant workers to their families.

In 2023, low- and middle-income countries received over $650 billion in remittances, surpassing official development aid and foreign direct investment.