Remittance Blow

SNS: The United States has long attracted the world’s brightest minds, with Indian immigrants forming a significant part of that inflow. Highly skilled, entrepreneurial, and deeply embedded in American economic life, the Indian diaspora has not only enriched the US economy but also maintained close financial ties with families back home. Against this backdrop, the Trump administration’s proposed remittance tax a 3.5 per cent levy on money sent abroad by foreign nationals is not only economically short-sighted but diplomatically provocative.

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Remittances from the US to India reached $32 billion in 2023-24, according to the Reserve Bank of India. These funds support millions of Indian households, fuel local economies, and boost India’s foreign exchange reserves. Taxing them at the point of exit penalises personal income that has already been taxed within the United States. It creates a double burden one that disproportionately affects Indian immigrants, who already contribute a significantly higher share of US tax revenues relative to their population size. The rationale for the tax retaining capital within US borders ignores the realities of a globalised workforce.