US Immigration, Visa Policies To Cut Net Remittances By $4.5 Bn In FY26

“The new H1B visa and remittance tax policies have amplified uncertainty, affecting the global economic sentiment since April 2025. This could increase the current account deficit by 0.1 per cent of GDP in a pessimistic scenario. A sharp fall in H1B visa issuances poses downside risks, potentially reducing the net remittances growth to 6.7 per cent in FY26”, said Paras Jasrai, Associate Director & Economist, Ind-Ra.

Further, net remittances growth could slow down to around 5 per cent in FY27, half the CAGR of 10.3 per cent during FY20-FY25.

Business as usual projections for net remittances stand at around $137.4 billion in FY26. Ind Ra has assumed a decline of 30 per cent, 20 per cent and 50 per cent in H1B visa issuances in the base, optimistic and pessimistic scenarios. Under the base scenario, net remittances would be hit by roughly $2.8 billion in FY26 or roughly 0.07 per cent of GDP. However, if there is a sharper drop of 50 per cent in visa issuances, then net remittances would be lower by $4.5 billion in FY26 or 0.11 per cent of GDP. On the other hand, if the decline in visa issuances is milder, net remittances would be lower by $2 billion.

Net remittances surged to $124.6 billion in FY25, more than doubling from $66.3 billion in FY15. India has been the top recipient of remittances since 2008, according to the World Bank. Remittances touched a decadal high of 3.18 per cent of the GDP in FY25 after six years of remaining below 3 per cent of GDP during FY17-FY22. Remittances have increased again due to the resilient and strong growth in the global economy.

The US had strengthened its leading position in India’s inward remittances, with its share rising to 27.7 per cent in FY24 as India is a key labour supplier for the US and other advanced economies. However, the recent increase in one-time fees of fresh H1B visa issuances to $100,000 from up to $5,000 is expected to cut remittances.