Shamini 
(C): Pop Base – twitter
For a major policy turn, the U.S. has narrowed its initial proposed excise tax on outbound remittances from 5% to 3.5% which will ease the burden of millions of Indian migrants. That change is put forth under the “One Big, Beautiful Bill Act,” a sprawling legislative sweep that passed by the slimmest of margins in the House (215-214) regarding imports, exports and money flows.
Called the “Excise Tax on Remittance Transfers”, the tax applies to legal immigrants, including H-1B workers, F-1 students and Green Card holders that send money abroad. The modification has alleviated cost issues, saving about $150 on each $10,000 remittance but has introduced some more strict compliance requirements. Transfers above $5,000 in one day will now trigger mandatory reporting and the stricter KYC norms.
In 2024, the World Bank reported that India had $129 billion in remittances, with 28 per cent ($25 billion) being sent from the U.S. The Global Trade Research Initiative (GTRI) states the tax could reduce remittances to India to the tune of 10-15 per cent, potentially lowering remittances by an annual $12-18 billion.
Winners are Indian labourers and service workers who may keep more of their pay, and families back home may receive a better net sum. However, this may create new bureaucratic hurdles for students or people who rely on transfers for educational purposes.
While this is a partial relief, the new tax still constitutes a move to a greater regulatory framework for global remittance flows and reflects how migrants support their families and economies back home.
