Trump's crackdown on migrants: Will the American dream turn sour for Indians?

It is not a good time to be a migrant in the US. Crackdowns on migrants, including on those with legal rights to stay, have increased dramatically in recent months since Donald Trump took over as US president. Los Angeles is currently seeing a wave of violence after migrants resisted arrest by immigration authorities. This resistance is, in turn, fuelling further violent crackdowns on civilian populations in the city.
Any long-term changes in US policies on migrants will have implications for Indians who have moved there—including green card holders having permanent resident status and those who have gone to the US for study, work, or to be with family.
Indian-origin population in the US was estimated at about 3.4 million in 2023, according to the Organisation for Economic Cooperation and Development (OECD). The Indian diaspora is the second-largest foreign population in the US, after the Mexican diaspora.
Over the previous three decades, Indians have increased their share in each of the visa types issued by the US to non-immigrants for four main purposes: tourism, studies, work, and to visit dependents. In 2022-23, Indians accounted for 86% of the US's H-4 visas (intended for dependents of foreign workers), 78% of H1-B visas (work visas), and 29% of student visas.
In addition, and perhaps more importantly, Indians accounted for about 14% of US green cards issued in 2022, up sharply from about 8% a decade earlier.
Post-covid surge
The broader context is that overall migration to the US, including by those on non-permanent visas (like student visas, but excluding tourists), has risen sharply in the post-covid period. While estimates by different arms of the US government vary sharply, the rise is unmistakable. The Congressional Budget Office, whose estimate of 3.3 million net migration to the US in 2024 is among the highest, predicts that net migration will fall to 2.6 million in 2025 and 1.6 million in 2026.
The post-covid surge was partly a recovery from the sharp slump caused by the pandemic, when strong international travel restrictions were in place. It is also a result of economic weakness in source countries in the post-covid period and a strong demand for workers in the US itself. According to a study by the Hamilton Project in the US, the surge in immigration added 0.1 percentage points to the US GDP in each of the years from 2022 to 2024.
Indians abroad
Post-covid, inward migration soared not just in the US but in high-income countries collectively. As per the OECD, its 38 member countries saw 'unprecedented levels" of around 6 million new migrants in 2022, excluding those from war-hit Ukraine. In 2023, per OECD's estimate, about 150 million people living in its member countries were foreign-born, whith about a third of them living in the US.
About 6.5 million Indians live in OECD countries, over half of them in the US. Indians now make up about 10% of the foreign-born population in countries such as Canada, Australia, and the UK. Some of these countries are imposing restrictions on migration, although several of them have ageing populations and depend on migrants to fill gaps in their labour force.
Remittance economy
As part of his clampdown on foreign migrants, Trump has proposed a 3.5% tax on foreign remittances by non-citizens in the US. This comes at a time when the US, and rich Western countries in general, have become more critical to India's remittance economy. In 2023-24, India received remittances of $118.7 billion. Less than a decade ago, West Asian countries such as the UAE were the principal source. Now, it's the US, with its share rising from 22.9% in 2016-17 to 27.7% in 2023-24, as per the Reserve Bank of India.
It's debatable what effect any tax on such remittances may have. A large proportion of remitters could use non-official channels to avoid the tax. According to RBI, 78% of Indian migrants to the US are employed in high-income sectors such as management, business, and science. In contrast, workers in the Gulf have tended to be manual labourers employed in construction or real estate. These may be uncertain times for all.
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