Trump Administration is in full swing to get the reconciliation bill, aptly named as OBBBA (One Big Beautiful Bill Act), passed through Senate now that it has been passed by the House of Representatives with a thin margin on May 22, 2025.

Senate review of the Bill is ongoing, with a vote expected by July 2025. President Trump is pushing vigorously for timely approval by Senate. If the bill is passed, implementation remains set for January 1, 2026.

It is going to be a landmark bill in the history of American legislation, putting the American nation into a new orbit on a new trajectory yet rooted in the sacrosanct cherished American values. While guarding American interests, the bill has certain impacts for the most law-abiding and progressive American community—the Indian Americans and America's natural ally, India.

Here is a summary of this bill’s likely impacts on Indian Americans and India-

The summary draws from sources like United Nations COMTRADE, Reserve Bank of India (RBI), and other recent data.

Impacts of the Bill on India:

India received $118.7–129 billion in global remittances (2023–24), with $32–33 billion (27.7–28%) from the United States (U.S.), per RBI’s March 2025 survey and World Bank 2024 data.

Non-citizens (1.3 million of 4.5 million Indian Americans, including H-1B, L-1 visa holders and green card holders) remit 60–70% ($19.2–22.4 billion).

Proposed 3.5% remittances tax (reduced from 5% before House passage) applies to non-citizen remittances, effective January 1, 2026, if approved by the Senate.

Non-citizens are likely to reduce remitting by 5–10% due to this new tax.

Resultant shortfall in Remittances to India could be 5–10% of $19.2–22.4 billion, that is $0.96–2.24 billion.

This shortfall would be impacting Kerala, Uttar Pradesh, Bihar and other states straining rural economies and real estate sector of Indian economy apart from other fallouts. Rupee may depreciate by Rs 0.5 per USD, requiring RBI interventions ($683 billion reserves, 2024).

Trade Risks: Along with this provision of the Bill, potential U.S. tariffs on $91.23 billion exports from India to US (pharmaceuticals $7 billion, information technology [IT] $33.2 billion, gems and jewellery $12 billion) threaten $191.8 billion trade. This can have compounding effect over and above on the buoyant economy of India.

Besides, immigration policy and measures may reduce H-1B visas (270,000, 70% Indian) limiting talent flows impacting India further.

This can have additional geopolitical implications.

However, India stands to gain an edge in its rivalry with its unfriendly expansionist neighbour, CCP-occupied China as Trump Administration takes vigorous actions against unfair monopolistic practices of CCP-occupied China. On the other hand, Trump Administration would be expectedly continuing to flip Pakistan away from CCP-occupied China and would also continue to be in alliance with Turkey because of NATO.

Improvement in America’s relations with Russia is likely to be a roller coaster ride and this too will have indirect impact because of its fall outs in US relations with NATO allies and Russian relations with CCP-occupied China.

India, like Israel, has a long way to chart out its destiny amid these upheavals. The only solace could be the fact that an administration like the erstwhile Biden-Harris Administration would have proved disastrous in any case.

Impacts of the Bill on Indian Americans (Approximate population 4.5 million):

Tax Impact (3.5%): Non-citizens (1.3 million) face $672–784 million tax (@ $35 on $1,000) @3.5% of $19.2–22.4 billion, annually.

As per regulations, money transfer firms must report transactions over $5,000 daily with enhanced Know Your Customer (KYC) compliance, potentially delaying transfers.

Other impacts - Social Program Cuts: Medicaid, Supplemental Nutrition Assistance Program (SNAP), housing, Affordable Care Act (ACA), and education cuts target illegal immigrants, not legal immigrants/citizens. So this won't have much impact on Indian Americans.

Immigration Enforcement: $46.5 billion for border walls, $6.1 billion for Border Patrol, heightened H-1B/green card scrutiny (78% high-skill) may impact the prospects of the Indian American community.

Tax Benefits: Indian businesses gain from a 23% (rise of 3% from the previous 20%) pass-through deduction. Almost 500,000 Indian Americans’ businesses gain from a 23% pass-through deduction, saving ~$5,000 – $10,000 per business annually, supporting remittances and jobs. This is likely to save additional amounts, almost offsetting remittance tax burden and supporting jobs, including some of the jobs for non-citizens among the community.

Economic Uncertainty: Visa/trade barriers may reduce job opportunities.

Mitigation Strategies

Advocacy / Diplomacy:

Organisations of the community like the Hindu American Foundation have been actively lobbying for exemptions, leveraging a $1.6 trillion Gross Domestic Product (GDP) contribution by 2030.

It is learnt that India’s Finance Ministry is exploring tax exemptions with its U.S. counterparts. Mexico and India are coordinating diplomatic pushback. Diplomacy also uses $191.8 billion trade leverage.

Import Substitution ($38.99 billion goods, $25.9 billion services):

Imports to India from US: Fuels ($13.6 billion), aircraft ($8.5 billion), medical equipment ($5.7 billion), machinery ($5.32 billion), defence ($4.3 billion), gems ($2.41 billion), plastics ($2.1 billion), agriculture ($2 billion).

Substitutes: Domestic substitutes include Reliance Industries, Hindustan Aeronautics Limited (HAL) and Defence Research and Development Organisation (DRDO) via $2–5 billion Production Linked Incentive (PLI) schemes. Global substitutes are Qatar, the European Union (EU), Japan, Brazil, and Germany.

Impact: Substituting $20–30 billion of imports saves $0.1–0.15 billion which is equal to 5–15% mitigation of the shortfall in remittances impacting USD forex reserves of India.

Redirecting Exports ($91.23 billion goods, $33.2 billion services):

Exports from India to U.S.: Pharmaceuticals, gems, textiles ($10 billion), IT, machinery ($10 billion), petroleum ($5 billion).

Redirect $10–20 billion exports to EU, Japan, Association of Southeast Asian Nations (ASEAN); absorb textiles/electronics exports domestically.

Impact: Reduces reliance on U.S. mitigating tariff impact.

Taxing Outbound Transactions ($8.86–15.15 billion):

Royalties/Intellectual Property Rights: $4–6 billion (Microsoft, Qualcomm).

Equity Returns: $0.86–1.65 billion (dividends $0.56–0.9 billion, capital gains $0.3–0.75 billion) from U.S. Foreign Institutional Investors (FIIs) ($50–60 billion equities).

Foreign Direct Investment (FDI) Profits: $4–7.5 billion (Apple, Amazon, $20–25 billion revenues).

Tax: 5–10% tax on outbound transactions listed above yields $443–1,515 million (offsetting 60–100% tax burden, 20–100% of shortfall in remittances). Tax Collected at Source (TCS) increase (5% to 10–20%) or Liberalised Remittance Scheme (LRS) cap at $100,000 redirects $1–2 billion. This measure is fully “World Trade Organisation (WTO)-compliant”.

De-Dollarisation:

Expand Indian Rupee (INR) trade (United Arab Emirates [UAE], Russia, $3–5 billion, 2023–24) to $5–10 billion by 2030.

Promote digital rupee, saving $0.1–0.25 billion.

Diversify 50–60% U.S. dollar reserves ($683 billion, 2024) to euros and other currencies, or gold ($2–5 billion).

Impact: Saves $0.1–0.25 billion (5–25% shortfall of remittances).

Talent Retention/Repatriation:

Retain 1–1.5 million workers via tech hubs (Bengaluru, Hyderabad), Indian Institutes of Technology (IIT)/Indian Institutes of Management (IIM), reducing H-1B migration (270,000 jobs).

Repatriate 50,000–100,000 NRIs with probable tax holidays, Overseas Citizen of India (OCI) benefits ($0.25–0.5 billion value).

Impact: Covers shortfall in remittances if they come back with their wealth.

Citizenship by Investment:

Offer OCI/citizenship for $1–5 million, attracting $0.5–1 billion FDI (20–100% shortfall).

American Companies’ - e.g. Apple’s - Investment in India and Exports of their “Made in India” products and services from India:

$22 billion iPhone production (FY25), targeting 25% global output by 2027, creates 200,000 jobs, $1.5 lakh crore exports. Tim Cook’s commitment (May 2025) leverages 40% cost advantage.

Impact: Offsets 5–20% shortfall by earning from exports of their products and services.

U.S. Substitution Challenges:

Substituting India’s $91.23 billion goods and $33.2 billion services risks 20–30% cost increases ($20–30 billion) and this would entail increased dependence on CCP-occupied China, conflicting with U.S. decoupling goals set for decoupling from CCP-occupied China and also conflicting with diversification of supply chain into “China Plus One”. So US would not opt for substitution in most cases, while India can opt for substitution gradually as stated above.

Economic Decoupling with Strategic Coupling:

Full economic decoupling may require 10–15 years, though there are talks of increasing and possibly more than doubling of bilateral trade in the next 5 years.

Partial to complete economic decoupling between India and the US minimises trade ($191.8 billion), investment ($68.93 billion U.S. FDI, $7 billion Indian FDI), and financial ties. Indian investment in the US is poised to rise, but decoupling would lead to reciprocal restrictions on Indian investment in the US, just on the lines Trump Administration is discouraging American investment in India.

Trade, investment and currency (US Dollar) usage may decrease or increase, preserving and enhancing strategic ties (Quadrilateral Security Dialogue [QUAD], Initiative on Critical and Emerging Technology [iCET]) is important for both these partners committed to the common goal of just, democratic and free world order.

Strategic Ties: Maintain defence ($22 billion deals), tech, clean energy collaboration as a permanent feature of US US-India relationship.

Meanwhile, as a provisional diaspora action, Non-Resident Indians (NRIs) are advised to accelerate large transfers before July 2025 to mitigate the impact in the initial phase.

Conclusion

Indian Americans can mitigate a $672–784 million tax burden for 2026 by preemptive remittances in June 2025, which may be up to December 2025, and later this can be offset by relief in direct taxes proposed in the bill. Indian American Community can continue to be a powerful growth engine for the progress of the United States of America led by nationalistic patriotic leadership and also as the fulcrum for strong inalienable US India relations, both the nations being and continuing under nationalistic democratic leadership firmly opposed to Wokeists, Globalists, Colonialists, Communists, Leftists and Jihadis at home and across the globe.

India can mitigate the $0.96–2.24 billion shortfall by -

substituting $20–30 billion imports ($0.1–0.15 billion),

taxing $8.86–15.15 billion transactions ($443–1,515 million),

de-dollarising ($0.1–0.25 billion),

redirecting $10–20 billion exports,

repatriating talent ($0.25–0.5 billion),

leveraging American investment in India, say Apple’s $22 billion investment, restricting Indian investment in US, and advocating diplomatically.

Partial decoupling covers 50–100% of the shortfall while preserving QUAD/iCET ties.

Full decoupling while enhancing strategic ties based on a common agenda can be a long-term goal due to trade interdependence.

By the end of decade, we may have largely self-reliant nations India and US working in tandem as strategic partners to thwart the CCP - Jihadi - Globalist - Colonialist - Leftist transnational nexus.

God bless the US, God bless India, God bless the US-India strategic partnership, God bless the Free World.

 

Image source: The Financial Express