India’s Migration Moment: Why FTAs Demand a Modern Labour Mobility Policy

As India rapidly expands its network of Free Trade Agreements (FTAs) — now covering more than 50 countries, including the recently concluded pact with New Zealand — a quiet but consequential opportunity is emerging. Beyond goods and services, these agreements are opening pathways for India to position itself as a reliable supplier of skilled and semi-skilled labour to ageing economies facing acute workforce shortages. Yet, even as demand for India’s youthful labour force rises, the country’s migration governance framework remains stuck in another era.

Demography is India’s strength — governance is its weakness

From healthcare workers and technicians to IT professionals and skilled trades, ageing societies across Europe, East Asia and parts of the Indo-Pacific increasingly depend on migrant labour. India, with its young population, is well placed to fill these gaps. FTAs add a critical layer by enabling structured mobility under recognised legal frameworks.

The constraint, however, is not excessive mobility but inadequate governance. India’s migration institutions have not evolved at the same pace as its economic integration with the world.

A migration law frozen in the 1980s

India’s emigration regime continues to rest largely on the Emigration Act, 1983 — a statute designed for a very different labour market. At the time, overseas employment was concentrated in West Asia and mediated almost entirely through physical recruitment agents and paper contracts.

The law introduced the Emigration Check Required (ECR) category, mandating clearance through a limited number of Protector of Emigrants offices for lower-skilled workers travelling to select destinations. While the intent was worker protection, four decades on the system has become cumbersome, unevenly enforced and poorly aligned with digital hiring platforms and diversified recruitment channels.

India today wants to treat labour mobility as an economic asset — exporting skills, earning remittances and embedding itself in global value chains. Yet migrants continue to be regulated as administrative risks rather than recognised as economic contributors.

Fragmented administration, not a migration strategy

Recent legislative efforts, such as the Immigration and Foreigners Act, 2025, focus primarily on border management, security and enforcement. These are important functions, but they do not constitute a migration strategy.

Outbound labour migration is overseen by the India Centre for Migration under the Ministry of External Affairs, supported by grievance redressal portals like MADAD and Samadhan, and various training programmes. While useful, these instruments operate in silos.

What is missing is a coherent national migration framework that integrates overseas mobility, skill certification, bilateral labour agreements and enforceable worker protections into a single policy logic.

Internal migration: the neglected half

India’s internal migration regime is even more fragmented. Welfare initiatives such as One Nation One Ration Card, PMAY and Affordable Rental Housing Complexes offer partial relief, but they do not amount to a rights-based migration policy.

Internal migrants still face weak labour protections, limited portability of social security and exclusion from urban welfare systems. The absence of a unified internal migration framework mirrors the shortcomings visible in overseas mobility governance.

Exporting labour in a closed-citizenship world

India is now the world’s largest source of international migrants, with an estimated diaspora of 35.4 million — including 15.8 million Indian citizens and 19.6 million persons of Indian origin. Advanced economies increasingly rely on migrant labour while remaining reluctant to extend political or citizenship rights.

This contradiction is most visible in Gulf Cooperation Council countries, as well as in economies like Japan and Singapore, where migrant workers sustain growth without long-term social integration.

The risks are growing. According to official data, 3,258 Indian nationals were deported by the United States in 2025 — the highest annual figure so far. Student migration has also surged, with nearly 13.8 lakh Indian students abroad in 2025, making India the largest source country for universities in the US, Canada, the UK, Australia and Germany. This largely self-financed migration exposes households to high financial and emotional risks, yet policy oversight remains thin.

Remittances mask, but do not solve, policy gaps

Remittances have long cushioned the consequences of weak migration governance. India has been the world’s largest recipient for over a decade, with inflows crossing $135 billion in 2024–25. These transfers support household consumption and strengthen the balance of payments.

But remittances cannot substitute for institutional reform. Migration continues because economic incentives are overwhelming. According to the International Organization for Migration, corridors such as India–US, India–UAE and India–Saudi Arabia rank among the largest globally. About 65 per cent of India’s external migrants are men, reflecting persistent skill and opportunity asymmetries.

FTAs and the missed labour mobility dividend

Multilateral frameworks like the World Trade Organization’s General Agreement on Trade in Services offer only broad principles on labour mobility. In practice, bilateral labour agreements shape access, rights and protections. Here, India’s coverage remains uneven, and enforcement weaker still.

As FTAs multiply, labour mobility should become a central negotiating pillar — not an afterthought. Mode 4 access, mutual recognition of qualifications, and social security portability are now as critical as tariff concessions.

What a modern migration policy must do

India stands at a pivotal juncture. If its demographic dividend is to translate into sustained economic advantage, migration must be treated as an economic enabler, not an administrative inconvenience.

A credible national migration policy should:

• Integrate overseas mobility into India’s trade and skills strategy.
• Align domestic skill certification with international demand.
• Ensure full portability of social security and enforceable worker protections.
• Reduce bureaucratic burdens on low-skilled workers, who are most vulnerable to exploitation.
• Replace control-heavy approaches with protection- and rights-based governance.

Why delay carries a human cost

India’s migration framework is failing not because people move, but because institutions have not adapted to mobility. Updating four-decade-old laws is no longer optional. Every year of delay shifts the cost onto migrants themselves — millions who cross borders in search of work, security and dignity.

As FTAs open doors abroad, India must ensure that its people step through them with protection, clarity and confidence. The opportunity is historic. So is the risk of missing it.