Published On 28/9/2026
India is currently facing what the Financial Times describes as a unique version of the “Chinese shock,” but instead of exporting a surplus of industrial goods to global markets, the world’s most populous country is sending millions of workers overseas. This migration stems from the local economy’s inability to provide adequate employment opportunities for the growing number of individuals entering the job market.
Every year, Indian universities produce approximately 5 million graduates, while about a million people join the workforce each month. This rapid pace exacerbates one of the most pressing challenges for the Indian economy: creating enough productive job opportunities, despite high growth rates.
Extensive Migration
India stands as the largest source of international migrants, with approximately 18.5 million Indians living abroad by 2024. A significant number of these migrants are found in English-speaking countries and the UAE. Over the past decade, Indian nationals have constituted the majority of approved H-1B visa applications in the U.S. for select professionals. Meanwhile, the UK welcomed around one million Indians between 2021 and 2025, and in Australia, Indians born abroad have surpassed their English counterparts, becoming the largest group of overseas-born residents for the first time.
The Indian government, under Prime Minister Narendra Modi, is actively leveraging its vast workforce, which includes the second-largest global base of science, technology, engineering, and mathematics graduates, to address skill shortages and counter the ageing populations of other economies.
Indian External Affairs Minister S. Jaishankar has announced that India has signed labour mobility agreements with 26 countries, with more in the pipeline. Labour mobility arrangements have also become critical components of the bilateral trade negotiations led by New Delhi.
Remittance Benefits
Worker migration brings significant financial gains to the Indian economy, with remittances amounting to around $150 billion last year, equating to nearly 3% of the country’s GDP. This positions India as the largest recipient of remittance flows globally. Additionally, the Indian diaspora serves as a valuable source of foreign currency, investments, and expertise. This summer, Indian banks raised over $50 billion by encouraging expatriates to repatriate their savings to India, a move aimed at bolstering the rupee.
While the migration of workers alleviates pressure on the domestic job market, it does come with economic costs. The Financial Times estimates that the loss of skilled professionals could cost India between $35 billion and $50 billion annually, partly due to potential productivity gains lost.
Employment Challenges
The reliance on exporting workers is also fraught with challenges, particularly as debates around immigration intensify in several advanced economies, and some countries tighten their policies towards foreign labour. This issue is particularly pronounced in the United States, where the Trump administration enforced stricter scrutiny on H-1B visas and raised associated fees, hindering a crucial pathway for Indian professionals seeking opportunities in the U.S. market.
The Financial Times contends that such developments may restrict India’s capacity to depend on foreign labour markets to absorb the persistently growing workforce. This phenomenon underscores a deeper economic challenge facing India: the necessity to create a sufficient number of productive jobs to capitalise on its demographic dividend, rather than relying increasingly on remittances from overseas workers.
While the “Chinese shock” relates to the flood of manufactured goods into global markets due to excess production capacity, India’s version involves the outflow of labour in response to the widening gap between workforce growth and the local economy’s ability to provide suitable job opportunities.