India’s Potential in the Global Labour Market

• India is on the brink of a demographic opportunity: a large, young, and increasingly skilled population amidst a global labour crisis. High-income countries are expected to face a 120-160 million labour shortage by 2040.
• While India currently generates about $125 billion annually from remittances, its migrant population makes up only 1.3% of the total, indicating significant untapped potential. A strong legal migration framework can transform India into a “Vishwa Karmayogi Bharat” — a global talent hub.

Global Labour Crisis: Factors Responsible

• Ageing Populations in Developed Countries: High-income nations like Japan, Germany, and Italy face declining birth rates and ageing populations, shrinking the working-age labour force.
• Low Workforce Participation Post-Pandemic: The COVID-19 pandemic resulted in early retirements, career shifts, & a decline in labour participation, particularly in healthcare, logistics, & hospitality sectors.
• Mismatch Between Skills and Demand: Rapid technological advancements have created demand for new skills, while traditional education systems struggle to keep pace, causing a skills gap.
• Restrictive Immigration Policies: Tighter immigration controls in several developed nations have limited the inflow of foreign workers, further exacerbating local labour shortages.
• Shift Towards Service and Knowledge Economies: As economies shift to services and high-tech, demand for skilled professionals in IT, healthcare, and engineering has surged, outpacing supply.

India’s Opportunity Amid Global Labour Shortages

• Rising Global Demand: Advanced economies are facing labour shortages across sectors like healthcare, engineering, teaching, and industrial work.
• Youthful Workforce Advantage: India’s young population is well-positioned to meet this demand, yet only 1.3% of Indians migrate abroad, far fewer than peers like Mexico (8.6%) or the Philippines (5.1%).
• Economic Contribution: Indian migrants send home $125 billion annually, contributing 3% to the GDP, more than any single export sector.
• Poverty Alleviation Impact: A 10% rise in remittances can reduce poverty by 3.5% in low-income countries, showing high developmental value.
• Untapped Potential: With targeted skilling, international alignment, and structured migration policies, India can emerge as a leading global talent supplier.

Challenges for India in Leveraging Global Migration Opportunities

• Low Migration Rate: Only 1.3% of Indians work abroad, which is much lower than Mexico (8.6%), the Philippines (5.1%), and Bangladesh (4.3%), highlighting untapped global potential.
• Skill Gaps: India’s education and skilling systems lack alignment with global standards, including foreign language training and international certifications.
• High Migration Costs: Expenses range from ₹1–2 lakh for Gulf countries to ₹5–10 lakh for Europe, deterring low-income aspirants.
• Policy Deficit: India does not have a dedicated migration framework, unlike the Philippines, which has comprehensive systems for recruitment, training, and worker welfare.
• Unregulated Migration Risks: Informal migration channels expose workers to exploitation; legal pathways and bilateral agreements are urgently needed.

Seven Pillars for Making India a Global Talent Hub

1. Institutional Framework for Migration: Establish a coordinated national and state migration system led by the MEA, modelled after the Philippines’ Department of Migrant Workers, with support from the embassy helpdesk.
2. Global Alignment of Skills and Accreditation: Align Indian skilling programs with international standards and languages. E.g., German language and elderly care training for jobs in Germany.
3. Migrant Financing Mechanisms: Ease migration costs through employer-funded or subsidized financing. E.g., the Philippines’ “Employer Staffing Agency-Pay” model that covers training and visa costs.
4. Government-to-Government Agreements: Negotiate bilateral labour mobility pacts to ease visa barriers, such as the India-Japan agreement on technical intern training programs.
5. Mobility Industry Body: Establish a national body for ethical recruitment, similar to the UK’s Gangmasters and Labour Abuse Authority, to ensure fair hiring practices.
6. Social Welfare Framework for Migrants: Ensure fair wages, health coverage, and legal recourse abroad. E.g., ILO standards and models like the UAE’s Wage Protection System.
7. Support for Returning Migrants: Facilitate reintegration through skills recognition and entrepreneurship support. E.g., Kerala’s NORKA Roots program for returnees.

India’s young workforce, if guided by a strategic & ethical migration framework, can become the world’s most trusted talent reservoir. Legal, structured migration empowers individuals and enhances India’s economic resilience and global goodwill, fulfilling the vision of a “Vishwa Karmayogi Bharat” in an ageing world.

Reference: Indian Express

PMF IAS Pathfinder for Mains – Question 155

Q. How can India capitalise on the global workforce crisis to become a preferred source of skilled human capital? Discuss. (150 Words) (10 Marks)

Approach

• Introduction: Write briefly about the global workforce crisis with facts and highlight India’s status.
• Body: Explain how India leverages the global workforce crisis as a preferred source of skilled labour.
• Conclusion: Write a multi-pronged strategy mentioning inclusive growth and economic resilience.