Recently, the US Senate has been moving toward passing a bill nicknamed the “Big Beautiful Bill.” This legislation has attracted significant attention both domestically and globally, raising debates and controversies among politicians, investors, and industry leaders. Here’s a detailed look at what the bill proposes, how it has progressed, and its potential impacts on India.
Background on the Bill
Earlier, the bill narrowly passed the House of Representatives with a vote of 215–214, as two Republicans voted “no” and one fell asleep during the vote. After passing the House, the bill now needs approval from the Senate before it can become law. Reports suggest it could add nearly $3.8 trillion to US debt, which has raised investor concerns and intensified opposition from the Democratic Party.
What the Bill Includes
This bill contains several significant measures:
Increases the pass-through deduction.
Makes the individual tax rate cuts permanent.
Restores 100% bonus depreciation.
Enhances R&D expensing.
Simplifies the tax code.
Encourages domestic manufacturing.
Eliminates taxes on tips.
Raises the standard deduction.
Extends the 2017 tax cuts implemented by Trump.
Allocates nearly $150 billion for a “Golden Iron Dome” defense system to protect the US from various types of attacks, including from space.
Implements stricter immigration policies aimed at reducing immigration levels.
Why It’s Called the “Big Beautiful Bill”
When Trump was campaigning, he made many promises. Instead of turning each promise into separate actions, he combined most of them into this single, comprehensive bill — hence the nickname “Big Beautiful Bill.”
The bill has attracted global attention and sparked controversy. Elon Musk, who was previously a strong supporter of Trump, opposed the bill, arguing that it would significantly increase US debt and be harmful to the economy. Despite opposition, Trump and his supporters have continued to promote the bill openly at rallies and on social media.
The bill also affects immigration enforcement. It proposes creating shelters or detention centers for people whose home countries refuse to take them back, enabling the US to hold them until deportation is possible. A large number of people affected by this provision come from Mexico, while approximately 700,000 people from India are also in the US and could be impacted.
What This Means for India
India is one of the top recipients of global remittances, with over $120 billion flowing into the country annually. These remittances significantly contribute to India’s consumption and GDP, supporting many sectors of the economy.
The bill proposes a 5% tax on remittances, meaning anyone in the US sending money to India would have to pay an additional 5% tax. This has raised concerns that remittance inflows to India could decline. However, a recent report suggests the proposed tax might be reduced to around 3%. It’s important to note that nearly $32 billion of India’s annual remittance income comes from the US.
On a positive note, the bill’s extension of the 2017 corporate tax cuts and measures to stimulate consumer spending in the US could benefit Indian IT companies, which earn more than 50% of their revenue from the US market. Increased consumer spending and business investment in the US are expected to have a positive effect on this sector.
Current Status of the Bill
As of now, the bill has not yet passed. It is still set to be discussed and debated in the Senate, after which a vote will take place. Only if it passes the Senate will it officially become law.
The “Big Beautiful Bill” could bring sweeping changes in tax policy, immigration enforcement, and defense spending in the US, with significant ripple effects globally — especially for India’s economy and the IT sector. While some aspects of the bill could benefit Indian businesses, others, like the remittance tax, pose potential risks to India’s economic inflows.
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