The 'One, Big, Beautiful Bill Act' is a proposed legislative package in the U.S. House of Representatives, aiming to reshape key areas of American policy. It's a comprehensive bill, addressing taxes, federal spending, and border security, leading to significant political debate. At its core, the bill seeks to make permanent the 2017 tax cuts, alongside new temporary tax breaks for tips, overtime, and auto loan interest. It also proposes increasing the standard deduction and child tax credit. Simultaneously, it targets substantial federal spending cuts, particularly to Medicaid, through stricter eligibility and work requirements.
A significant portion of the bill focuses on border security, with proposals to fund wall construction, increase border patrol personnel, and invest in advanced technology. Changes to asylum policies and increased fees for asylum seekers are also included. The bill's controversial elements, like the potential 5% remittance tax and alterations to existing tax deductions, are generating significant opposition. Even within the Republican party, disagreements persist over spending cuts and Medicaid work requirements. Non-partisan analyses suggest the bill could substantially increase the national debt. Currently, the bill has advanced out of the House Budget Committee, but its path to becoming law remains uncertain, as it faces significant hurdles in the full House and Senate.
Why the 'One Big Beautiful Bill' has made Indians in America anxious
'The One Big Beautiful Bill' has sent ripples of concern across Indians in American. Economic Think Tank, the Global Trade Research Initiative (GTRI), has warned that the proposed 5 per cent tax on remittances sent abroad by non-US citizens could significantly impact Indian households and exert downward pressure on the rupee. The controversial provision specifically targets international money transfers made by non-US individuals, including Green Card holders and temporary visa workers such as those on H-1B and H-2A visas. Notably, the proposed levy would not apply to US citizens.
"The proposed US tax on remittances sent abroad by non-citizens is raising alarm in India, which stands to lose billions in annual foreign currency inflows if the plan becomes law," stated GTRI in its analysis. India is a major recipient of remittances, having received an estimated USD 120 billion in the financial year 2023-24. A significant 28 per cent of these inflows originated from the United States.
GTRI founder Ajay Srivastava highlighted the potential financial burden on Indian expatriates and their families. "A 5 per cent tax could significantly raise the cost of sending money home. A 10-15 per cent drop in remittance flows could result in a USD 12-18 billion shortfall for India annually," he explained.
"RBI may be forced to intervene"
The economic consequences could extend beyond individual households. Srivastava cautioned that such a substantial reduction in dollar inflows would tighten the supply of US dollars in India's foreign exchange market, potentially leading to a modest depreciation of the Indian rupee. "The Reserve Bank of India may be forced to intervene more frequently to stabilise the currency. The rupee could weaken by ₹1-1.5 per US dollar if the remittance shock plays out fully," he added.
States in India most likely to be impacted by the taxation provision
The impact would be particularly felt in states like Kerala, Uttar Pradesh, and Bihar, where millions of families rely heavily on remittances from overseas workers to cover essential expenses such as education, healthcare, and housing. A sudden decline in these funds could severely impact household consumption at a time when the Indian economy is already navigating global economic uncertainties and inflationary pressures.
GTRI further argued that by taxing global capital flows, the US could inadvertently disrupt a crucial channel for global development financing, reduce household incomes in developing nations, and weaken demand in economies already grappling with inequality and instability.
The development gains added significance in light of India's recent proposal at the World Trade Organization (WTO) advocating for a reduction in the cost of cross-border capital flows and remittances, highlighting a stark contrast in policy approaches.
Status of the 'One, Big, Beautiful Bill Act'
As of May 19, 2025, the "One, Big, Beautiful Bill Act" has advanced out of the House Budget Committee. However, it still needs to be voted on by the full House of Representatives and would then need to pass the Senate before it could become law. Negotiations and potential amendments to the bill are ongoing.
A significant portion of the bill focuses on border security, with proposals to fund wall construction, increase border patrol personnel, and invest in advanced technology. Changes to asylum policies and increased fees for asylum seekers are also included. The bill's controversial elements, like the potential 5% remittance tax and alterations to existing tax deductions, are generating significant opposition. Even within the Republican party, disagreements persist over spending cuts and Medicaid work requirements. Non-partisan analyses suggest the bill could substantially increase the national debt. Currently, the bill has advanced out of the House Budget Committee, but its path to becoming law remains uncertain, as it faces significant hurdles in the full House and Senate.
Why the 'One Big Beautiful Bill' has made Indians in America anxious
'The One Big Beautiful Bill' has sent ripples of concern across Indians in American. Economic Think Tank, the Global Trade Research Initiative (GTRI), has warned that the proposed 5 per cent tax on remittances sent abroad by non-US citizens could significantly impact Indian households and exert downward pressure on the rupee. The controversial provision specifically targets international money transfers made by non-US individuals, including Green Card holders and temporary visa workers such as those on H-1B and H-2A visas. Notably, the proposed levy would not apply to US citizens.
"The proposed US tax on remittances sent abroad by non-citizens is raising alarm in India, which stands to lose billions in annual foreign currency inflows if the plan becomes law," stated GTRI in its analysis. India is a major recipient of remittances, having received an estimated USD 120 billion in the financial year 2023-24. A significant 28 per cent of these inflows originated from the United States.
GTRI founder Ajay Srivastava highlighted the potential financial burden on Indian expatriates and their families. "A 5 per cent tax could significantly raise the cost of sending money home. A 10-15 per cent drop in remittance flows could result in a USD 12-18 billion shortfall for India annually," he explained.
"RBI may be forced to intervene"
The economic consequences could extend beyond individual households. Srivastava cautioned that such a substantial reduction in dollar inflows would tighten the supply of US dollars in India's foreign exchange market, potentially leading to a modest depreciation of the Indian rupee. "The Reserve Bank of India may be forced to intervene more frequently to stabilise the currency. The rupee could weaken by ₹1-1.5 per US dollar if the remittance shock plays out fully," he added.
States in India most likely to be impacted by the taxation provision
The impact would be particularly felt in states like Kerala, Uttar Pradesh, and Bihar, where millions of families rely heavily on remittances from overseas workers to cover essential expenses such as education, healthcare, and housing. A sudden decline in these funds could severely impact household consumption at a time when the Indian economy is already navigating global economic uncertainties and inflationary pressures.
GTRI further argued that by taxing global capital flows, the US could inadvertently disrupt a crucial channel for global development financing, reduce household incomes in developing nations, and weaken demand in economies already grappling with inequality and instability.
The development gains added significance in light of India's recent proposal at the World Trade Organization (WTO) advocating for a reduction in the cost of cross-border capital flows and remittances, highlighting a stark contrast in policy approaches.
Status of the 'One, Big, Beautiful Bill Act'
As of May 19, 2025, the "One, Big, Beautiful Bill Act" has advanced out of the House Budget Committee. However, it still needs to be voted on by the full House of Representatives and would then need to pass the Senate before it could become law. Negotiations and potential amendments to the bill are ongoing.
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