The India shock: exporting workers to the world

{"text":[[{"start":null,"text":""}],[{"start":5.9,"text":"India has its own version of the “China shock”. Instead of exporting high volumes of competitive manufacturing goods across the globe, the world’s most populous nation sends millions of workers abroad."}],[{"start":17.46,"text":"India churns out roughly 5mn graduates each year and around 1mn people enter its workforce every month. But just as the Chinese economy lacks the demand to absorb more of its industrial production at home, India’s cannot produce enough suitable jobs to employ its expanding labour supply. Youth underemployment is rife, despite the country’s rapid growth rate."}],[{"start":null,"text":""}],[{"start":39.22,"text":"As a result, many Indians, often well-educated and English-speaking, move abroad to pursue careers. The country is the world’s largest source of international migrants, with an estimated 18.5mn living abroad in 2024. The Anglosphere and United Arab Emirates are common destinations."}],[{"start":57.12,"text":"Indeed, over the past decade, Indian nationals have accounted for the vast majority of approved H-1B petitions, a US visa for global professionals in selected fields. In the UK, about 1mn Indian nationals arrived between 2021 and 2025. Meanwhile, last year Indians overtook the English for the first time to become Australia’s largest overseas-born group."}],[{"start":null,"text":""}],[{"start":81.78,"text":"Under Prime Minister Narendra Modi, the country has positioned its large labour force — which includes the world’s second-biggest pool of science, technology, engineering and mathematics (Stem) graduates — as an answer to skills shortages and ageing demographics abroad."}],[{"start":97.387,"text":"S Jaishankar, India’s foreign minister, recently said the country had signed labour-mobility pacts with 26 countries, with more in the pipeline. Such arrangements have been a central pillar of India’s bilateral trade negotiations. An overseas mobility bill also aims to help Indians access the “global workplace”."}],[{"start":115.7,"text":"This strategy has several upsides for New Delhi. At around $150bn last year, 3 per cent of its GDP, the country is by far the largest recipient of remittance payments. Returnees and the overseas community are sources of foreign exchange, investment and knowhow for the country. This summer, domestic banks raised more than $50bn by encouraging the diaspora, the world’s largest, to shift savings to India as part of measures to shore up the rupee."}],[{"start":143.26,"text":"Crucially, as with China’s overproduction, overseas markets provide a release valve. The export of workers enables the Indian government to ease socio-economic strains at home, where frustration abounds over the lack of good job opportunities."}],[{"start":null,"text":""}],[{"start":157.18,"text":"But there are drawbacks to the worker-export model. For example, one estimate suggests brain drain costs India between $35bn and $50bn per annum, owing in part to lost productivity growth. Many Indians end up settling abroad."}],[{"start":172.82,"text":"And just as China is experiencing a worldwide backlash against its exports, India faces one as well."}],[{"start":179.5,"text":"Scepticism about immigration continues to animate politics in the rich world. And the recent surge in arrivals from the subcontinent, who join historical waves of emigration, puts a growing spotlight on people of Indian origin abroad."}],[{"start":193.54,"text":"Relative to native-born citizens and other migrant populations, Indian-born migrants and people of Indian heritage tend to obtain higher levels of education and earnings. Their rising prominence in public life — as chief executives, politicians and heads of prestigious organisations — can drive animosity. And though Indian nationals often dominate high-skilled immigration routes, family members and less-skilled individuals have emigrated too, in some cases by abusing the rules. This all provides fuel for anti-immigrant narratives."}],[{"start":null,"text":""}],[{"start":224.02,"text":"Indeed, anti-Indian sentiment is on the rise. Just this month, the Republican nominee for a seat on Texas’s oil and gas regulator sparked allegations of racism for a social media post aimed at South Asian students. Last year, Indian-origin migrants were explicitly targeted in “March for Australia” rallies. Anti-South Asian slurs in online spaces in the US have also surged. The backlash could hinder the Modi government’s strategy. As it happens, US President Donald Trump has raised scrutiny of and fees for H-1B visas."}],[{"start":256.22,"text":"The “India shock” has implications for both sides. Rich economies need talented young workers. But a policy of immigration warrants robust administration, investment in housing and public services and initiatives to encourage integration and cohesion. Otherwise it won’t be sustainable."}],[{"start":272.66,"text":"India, meanwhile, cannot rely on remittances and its diaspora alone. The worker-export model reflects a deeper challenge facing New Delhi, which must strive to create enough productive work to better harness the country’s demographic dividend. China lacks consumer confidence. India lacks jobs. Neither can export its way out of domestic problems."}],[{"start":292.86,"text":"Send your thoughts via the comments, [email protected] or on X @tejparikh90."}],[{"start":299.74,"text":"Food for thought"}],[{"start":300.74,"text":"How do recessions influence the flow of doctors into different practices of medicine? A recent US study explores."}],[{"start":307.78,"text":"Free Lunch on Sunday is edited by Harvey Nriapia"}],[{"start":null,"text":""}],[{"start":314.92,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790565717_1383.mp3"}