Remittens
There is increasing concern in India over the proposal to impose five per cent tax on non-teachers sending money abroad in the US. The Economic Research Institute Global Trade Research Initiative (GTRI) said on Sunday that it could damage Indian families and rupees. According to an estimate, this tax may cost Indians living in the US more than US $ 1.6 billion annually. This provision is part of the comprehensive legislative package called ‘The One Big Beautiful Bill’ presented in the US House of Representatives on 12 May.
These people will be affected
It will affect more than four crore people, including green cards and H1B visas. The proposed fee will not apply to American citizens. GTRI said, “The proposal to tax the non-disobedients in the US to send taxes abroad is increasing in India, because if this plan is made law, India will suffer billions of dollars in the annual foreign exchange flow.” GTRI founder Ajay Srivastava said, “Five percent of tax can lead to a significant increase in the cost of remedies. If there is a decline of 10-15 percent annually in money remittance, India would lose $ 12–18 billion. ”
Pressure will be made on rupee
He said that this loss will reduce the supply of US dollar in India’s foreign exchange market, which will create pressure on the rupee. Srivastava said, “The Reserve Bank of India may have to intervene more often to stabilize the currency. Due to this, the rupee can weaken up to Rs 1-1.5 per US dollars. ”
How much will be the effect
According to an article published in the Reserve Bank of India (RBI) march bulletin, India received a total of $ 32.9 billion from the US in 2023-24. Its five percent will be $ 1.64 billion. The RBI article stated that the amount received from the remittance of money is mainly used for the maintenance of the family, so its cost has a socio-economic effect. Reducing this cost has been an important policy agenda globally.
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