India to be worst hit with loss of $315 mln due to US' remittance tax - ADB
This story was originally published at 19:42 IST on 23 July 2025
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NEW DELHI – India being US' top remittance receiving country, will face a loss of $315 million due to Washington's 1% tax on foreign remittances, Asian Development Bank said in its outlook for July. Although India's loss would be the largest in absolute terms, it amounts to just 0.01% of its GDP. "Though the impact may be small from a macroeconomic perspective, low-income households that rely on remittances are likely to be disproportionately affected by these losses," the multilateral development bank said.
Under US President Donald Trump's "Big, Beautiful Bill," which was passed in the US senate in early July, 1% tax is set to be imposed on remittances from January 2026. The final rate of 1% adopted by US Congress is much lower than the originally proposed 5%.
India's inward remittances totalled $137.7 billion in 2024. The US had the largest share in India's total remittances at 27.7% in 2023-24 (Apr-Mar), rising from 23.4% in FY21, according to a Reserve Bank of India staff paper released in May.
ADB said that its estimate of possible loss likely represents upper bounds of the actual impact of the tax, as it is assumed that the 1% tax will be levied on all remittances. "However, remittance service providers may absorb part or all of the tax to remain competitive against US banks, which are exempt," it said.
The finance ministry has time and again said India continues to receive healthy remittances and is working to make the process smoother. End
US$1 = INR 86.41
Reported by Priyasmita Dutta
Edited by Akul Nishant Akhoury
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