India seems to have found a temporary solution to its unemployment problems as developed nations, grappling with labour shortages, are increasingly seeking workers from the country. The Union government is facilitating agreements with countries like Israel, Italy, and Greece to provide skilled and semi-skilled labour in various sectors, including construction, farming, and manufacturing.
After its deal with Israel earlier this year, India has been approached by Greece to send up to 10,000 seasonal agricultural workers. Italy is also seeking Indian workers to staff municipal bodies in its depopulating towns. These developments come as developed nations face a labour shortage exacerbated by rising costs and rampant inflation. India, with its large and youthful population – half under the age of 25 – presents an attractive pool of affordable labour.
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The initial agreement between Israel and India for 42,000 workers may expand further. Originally, 10,000 construction workers were expected, but this number could increase to 30,000 in the coming months, according to the Israel Builders Association (IBA). The Israel-Hamas conflict has also fuelled the demand for Indian workers in Israel. Before the conflict intensified in October, 18,000 Indians were in Israel, primarily employed as caregivers for the elderly. As the conflict continues, Israel is looking to quickly fill nearly 90,000 jobs, previously held by Palestinians.
Global labour shortage
In recent years, India has signed numerous migration agreements with countries such as France, the UK, Germany, Australia, Finland, and Austria. The ministry of external affairs is in discussions with the Netherlands, Taiwan, South Korea, and Denmark. According to a report by the Indian Council of World Affairs in New Delhi, India signed 17 agreements with various countries between January 2015 and March 2023, a significant increase from the five agreements signed between 1985 and 2014.
The allure of foreign employment is strong for many Indians, associated with better job opportunities, higher wages, and improved livelihoods for migrant workers and their families. This trend is particularly beneficial for states with stagnant populations. While states like Haryana, Punjab, and Tamil Nadu have a history of international migration, there is a push to extend these opportunities to other states. For instance, the Haryana government is already capitalising on this opportunity, issuing a notice to recruit 10,000 skilled workers for Israel for roles in carpentry, iron bending, ceramic tiles, and plastering. The government, through initiatives like the Pravasi Kaushal Vikas Yojana (PKVY), is working to spread the benefits of migration to other states.
While the immediate benefits of remittances and unemployment reduction are evident, this will have a long-term impact on India’s skill development and potential brain drain. Mass migration of skilled workers could deplete crucial sectors like healthcare and construction, especially in states with already declining young populations. The government must invest in targeted domestic skill development programmes to cater to both internal and external labour demands. Additionally, robust monitoring and support systems are needed to ensure returning migrants can reintegrate into the domestic workforce, leveraging their acquired skills and experience.
In the 2023-24 budget speech, the government announced the establishment of 30 Skill India International Centres to provide training and certification in line with international standards. Two such centres in Varanasi and Bhubaneswar are already operational, offering destination-based skilling, re-skilling, immigration assistance, and post-placement support.
This trend is not without its challenges. While foreign employment can bring remittances and alleviate unemployment, concerns about exploitative work conditions and discrimination faced by migrant workers abroad need addressing. The government must negotiate robust agreements with partner countries to protect workers’ rights, ensure fair wages, and guarantee safe working conditions.
Additionally, the outflow of skilled workers from key sectors like construction and agriculture could exacerbate labour shortages within India, especially in states with declining populations. For example, many caregivers in the health sector hail from Kerala, a state with a declining young population. The continued migration from states with stagnant population growth could deepen demographic imbalances.
Beyond concerns about work conditions and discrimination, India must create a strong ethical and regulatory frameworks to protect migrant workers. The government must prioritise negotiations with partner countries to establish clear guidelines on minimum wages, social security provisions, grievance redressal mechanisms, and cultural sensitivity training for employers. Implementing stricter regulations on recruitment agencies and establishing dedicated support networks abroad would further safeguard migrant rights and prevent exploitation.
Data from 2023 highlights India’s severe labour shortage across various sectors, including factories, engineering units, manufacturing and assembling plants, and infrastructure projects. Therefore, the government must balance its overseas employment strategy with domestic demand for labour, ensuring that the country’s skilled and semi-skilled workforce is not depleted, especially as other countries, like those in the Gulf region, open their doors to Indian workmen.