India Aims to Send Millions of Workers Abroad to Filling Labor Shortages in Developed Economies

Strategic Insights -

As the Indian government and businesses increasingly acknowledge the country's vast population of able-bodied workers, a movement is gaining traction to export more workers to countries with labor shortages. India has a daunting challenge of accommodating tens of millions more workers than its employers can accommodate, while other countries face the opposite problem: more jobs than workers. To bridge this gap, India is working to make it easier for its citizens to move abroad, with a focus on countries like Germany and Japan, which are experiencing labor shortages.

Key Takeaways:

  • India has a population of tens of millions more workers than its employers can accommodate, making labor export a viable solution to address labor shortages in developed economies.
  • The country is quietly signing labor mobility agreements with developed economies in Europe and Asia, including the Persian Gulf, without much history of hiring Indian workers.
  • A study by the Boston Consulting Group estimates a global shortfall of 45 million to 50 million workers by 2030, up from five million in 2023.
  • The Global Access to Talent From India Foundation estimates that India could double its current export of 700,000 workers a year to 1.5 million by 2030, providing much-needed labor to countries like Germany and Japan.
  • Labor mobility could help address the underemployment crisis in India, where about 50 million Indians working in services or manufacturing have had to return to agricultural work since the Covid-19 pandemic began.
  • Host countries like Germany and Japan are attracting the most attention within India, with the German ambassador, Philipp Ackermann, stating that his government would have to step up its messaging on bringing in more workers.
  • Indian workers, many of whom speak English and Hindi, are eager to move abroad, with some studying languages like Japanese and German to facilitate their migration.

Statistics:

  • 700,000Indian workers are currently exported annually, a number that the Global Access to Talent From India Foundation estimates could double to 1.5 million by 2030.
  • A study by the Boston Consulting Group estimates a global shortfall of 45 million to 50 million workers by 2030, up from five million in 2023.
  • India's economy is expected to grow rapidly, but it will not create jobs fast enough to solve the crisis of underemployment, according to a research paper by Chetan Ahya, the chief Asia economist at Morgan Stanley.
  • Indian workers currently send $135 billion in remittances annually, and the temporarily expatriated workers will bring back capital and know-how to spur enterprise in their home country.
  • Germany and Japan have recently signed agreements with India, in addition to Finland and Taiwan, to facilitate labor mobility.

Sources:

  • "India's labor export push gains momentum" by The New York Times
  • "Global Access to Talent From India Foundation" report
  • "Boston Consulting Group" report
  • "Chetan Ahya, chief Asia economist at Morgan Stanley" research paper
  • "Philipp Ackermann, German ambassador to India" interview with The New York Times