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AFP via Getty ImagesTucked deep in the growth of Donald Trump “One, big, beautiful bill” This is a point that could safely take the billions from the money sent abroad.
It offers 3.5% cash transfer tax Sent abroad by foreign workers, including the owners of green cards and temporary visa workers such as H-1B visas. For India, the main recipient of the world is serious, experts say. Other large recipients – Mexico, China, Philippines, France, Pakistan and Bangladesh.
In 2023 Indians abroad sent home 119 billion. Dollars (£ 88 billion) – Enough to finance half the trade deficit of India and direct foreign investment, according to paper India Reserve Bank (RBI) economists. From this the biggest fate came from the US. For millions of migrants, which include money connected to cover parents, teaching a nephew or mortgage return home.
Billions from working migrants, many of which are already paying taxes in America, can pass. Probable result? Increasing informal, invalid remittances and dents in the most stable source of external financing in India.
According to the World Bank, India remains the main recipient of remittances, and its share has grown from 11% to 14%, the World Bank reports. The Central Bank of India states that money is expected to remain strong, reaching approximately $ 160 billion by 2029. Representatives of the country have invariably hover about 3% of GDP since 2000.
India’s international migration population increased from 6.6 million in 1990 to 18.5 million in 2024, and its world share increased from 4.3% to more than 6%. While in the Gulf of Persian there is still almost half of all Indian migrants, qualified migration in developed economies – especially in the United States – has increased significantly, due to the global IT hunting of India.
The United States remains the main source of remittances worldwide, and its share has grown from 23.4% in 2020-21 to almost 28% in 2023-24, due to the strong recovery and growth of 6.3% in 2022. In particular, 78% of Indian migrants in US sectors, such as leadership, business, scientific and art.
Cash costs – due to the fee and the currency transformation – have long caused problems with global policy from their influence on families. While global average costs remain above targets, India stands out as one of the most accessible places that reflect digital channels and enhanced market competition.
AFP via Getty ImageA 10-15% drop in money can cost India 12-18 billion a year, increasing dollars and putting pressure on Rupa, reports Ajay Srivastava from the Delhi-Analytical Tank Global Research (GTRI). He believes that the Central Bank may have to join the currency more often.
A larger blow will join households in states such as Kerala, Uttar Pradesh and Bihar, where cash is funded by essentials such as education, health and housing. The tax can “hit the consumption of households”, even if the Indian economy fights global uncertainty and inflation, Mr. Srivastov notes in the note.
Cash tax can squeeze Indian home budgets, weaken consumption and investment and blow one of the most stable currency sources in India, warns a short WTO research center based in Delhi. Maharashtra, followed by Kerala and Tamil Nadu, remain among the dominant state -maintaining states.
Monetary transfers in India are largely used for consumption of home, savings and investments in assets such as housing, gold and small business. According to the policy, the Bunji Home, the saptarshee mandal and the Divyansh Dua.
The flow of inflow can reduce internal savings and reduce investments both in financial and physical assets. If the influx of remittances is reduced, households are probably “prioritized in consumption (such as food, health and education) for savings and investments,” the short order said.
Gets the imageA study According to the Center for Global Development, the analytical center based in Washington believes that the proposed tax may dramatically reduce official translations, and Mexico will face the biggest hit – more than 2.6 billion dollars annually. Other major losers include India, China, Vietnam and several Latin American countries like Guatemala, Dominican and Salvador.
Of course, there is still some confusion related to tax, and the final approval awaits the actions in the Senate and the presidential signature.
“The tax is extended to all non -state and even UN Embassy and World Bank staff. But those who pay taxes may require tax loan. Thus, the transfer tax will be extended only to those migrants that do not pay taxes. This mainly includes unauthorized migrants (and diplomats),” BBK.
D -R Rat wrote in a note on LinkedIn that migrants will try to reduce the cost of transfer by referring to informal methods – cash, sending money through friends, couriers, bus drivers or airlines by organizing payments to local currency through friends in the US or using the US Hall, checks and cryptocurrencies.
“Will the tax containment of unauthorized immigration in the US be offered? Will it encourage unauthorized migrants to return home?” Wonders Dr. Rata.
Not quite, he says. Working with the minimum wage in the United States earns more than $ 24,000 a year – about four -30 times more than in many developing countries. Usually, migrants are sent home from $ 1800 to $ 48,000 annually, it is estimated by Dr. Rata.
“The 3.5% tax can hardly contain these remittances. After all the main motivation for migration, migrants trying to cross the oceans, rivers and mountains are to send money home to help helpless family members.”
