India can benefit from global skills shortage

Source: The post India can benefit from global skills shortage has been created, based on the article “Talent shortage — global challenge, India’s opportunity” published in “The Hindu” on 24th February 2025.

UPSC Syllabus Topic: GS Paper3- Economy- growth, development and employment.

Context: The article discusses the global shortage of skilled workers and how India can benefit. It highlights workforce demands in different regions, challenges like immigration barriers, and India’s initiatives. It stresses the need for better policies to boost India’s global workforce presence.

For detailed information on India’s Role in the Global Job Market read this article here

Why is the global labour market facing a skills shortage?

1. A FICCI-KPMG study estimates a shortage of 85.2 million skilled workers by 2030.
2. This shortage may lead to $8.45 trillion in unrealised annual revenue, equal to the GDPs of Germany and Japan combined.
3. Aging populations in Europe, GCC, and Australia are increasing demand for healthcare workers.
4. The GCC and Australia need more manufacturing and construction workers.
5. Europe needs more service-sector workers as it is the oldest post-industrial society.
6. Emerging sectors require skills in AI, big data, IoT, blockchain, and sustainability.

Which regions need skilled workers the most?

1. Gulf Cooperation Council (GCC): High demand for manufacturing and construction workers due to regional development needs.
2. Europe (including the United Kingdom): Requires more service-sector workers because it is the oldest post-industrial society, facing a workforce deficit.
3. Australia: Similar to the GCC, needs skilled labor in manufacturing and construction to support its economic activities.
4. Common to all regions: Healthcare professionals are increasingly needed due to aging populations and expanding healthcare requirements.

What are the barriers to skilled migration?

1. Several challenges limit the movement of skilled workers. These include strict visa regulations, unrecognised Indian qualifications (especially in medicine), exploitative recruitment practices, and language barriers.
2. Indian degrees are not accepted everywhere, leading to underemployment. Recruitment fraud and human trafficking also create risks for migrant workers.

What is India doing to address these challenges?

1. Bilateral and Free Trade Agreements (FTAs): India has agreements with GCC nations to protect Indian workers. The Joint India-UAE Vision emphasizes skill cooperation.
2. Skill Development Programs: India runs training programs to align workers’ skills with global market needs, covering sectors like automation, AI, big data, IoT, blockchain, and sustainability.
3. Digital Workforce Support Platforms: Online recruitment systems help protect workers from fraudulent practices, especially in GCC countries.
4. Regulation of Recruitment Practices: Stricter oversight aims to prevent exploitation and human trafficking, as highlighted by Prime Minister Modi during his U.S. visit.
5. Recognition of Qualifications: India pushes for mutual recognition of academic and professional degrees, especially in medicine, to reduce underemployment in Europe.
6. Public-Private Partnerships: The Central and State governments promote private sector participation in training and global employment facilitation.
7. Circular Migration and Mobility: India supports temporary work visas and rotational workforce models to address global labour shortages without causing demographic imbalances.

For detailed information on India’s Role in the Global Job Market read this article here

How can India benefit from the global skills gap?

India has a large skilled workforce and faces less hostility in most global markets. Countries with anti-immigration policies still accept skilled Indian workers. By preventing illegal migration and improving global workforce integration, India can strengthen its reputation. India’s GDP target of $9 trillion by 2030 depends on how much of the $8.45 trillion global opportunity it can capture.

Question for practice:

Discuss how India can benefit from the global shortage of skilled workers.