India on the move

A fast growing global player

A set of records

india-icon5.pngWith its 15.8 mln people working in other countries, India is today the world’s largest exporter of labour – followed by Mexico, Russia and China.

Europe and South-East Asia have been gaining pace, but major destinations since the 90’s remain: US, UK and Canada and the Gulf countries.

About 3.5 mln of Indians live in the UAE: this is the world’s second largest migration corridor.

Labour outflows make India the world’s largest recipient of migrant workers remittances.

Students from India are expected to be the largest group of mobile students in the world by 2024. They go to the US but also increasingly to Australia and New Zealand.

Brain gain

india-icon1.pngA growing number of Indian migrants is returning and setting up business ventures in India. The rapid expansion of the IT industry and overall economic growth is attracting Indian as well as foreign nationals.

This trend looks set to continue, also thanks to recent favourable policies from the government. Foreign Direct Investments (FDI) are on the rise (30% year-on-year rise between April-September 2016). Services and telecommunications are attracting most investments.

Cost of living and working in India

india-icon2.pngOn a global scale India is among the cheapest places where to live according to the recent report on Cost of Living from the Economist Intelligence Unit. Bangalore, Chennai, Karachi, Mumbai and New Delhi rank among the 10 cheapest cities in the world.

However expatriate packages are among the most expensive in the Asia Pacific Region, according to ECA International. Main cost drivers are incentives often included in the package and the impact of taxation.

Additional benefits included in the package by multinational companies for top management and international workers can lead to a significant salary increase up to 50%-70%.

New Delhi is the most expensive location for expatriates in India, followed by Mumbai and Chennai.

Expatriates and social security:

india-icon3.pngIt’s only in 2008 that India made cross border workers subject to the national social security system, with a reform act that introduced the category of international workers, and clarified related benefits coverage and withdrawal conditions.

These terms apply to both foreign workers coming to India and Indian nationals going abroad to work in one of the countries where a Social Security Agreement (SSA) is in place.

SSAs help achieve equal treatment of workers and avoidance of gaps or double coverage, and allow for exemptions and more flexible terms.

India has Social Security Agreements in place with: Belgium, Germany, Switzerland, Denmark, Luxembourg, France, South Korea, Netherlands, Hungary, Sweden, Finland, Czech Republic and Norway.

SSAs signed but not yet operational involve: Canada, Japan, Austria, Portugal and Australia.

In a snapshotindia-icon6.png

Demographics: 

  • Large: With its over 1.2bln population, India is the 2nd most populated country in the world, right after China (over 1.3bln)
  • Young: About 60% of Indians are aged between 15 and 59
  • In line with global trends, urban population is growing (up to 30%).
  • English is widely spoken and is the major language of politics and commerce - though more than 1500 languages and dialects are spoken across the country.
  • Its large, youthful and skilled labour force contribute to making India an attractive investment destination.

Economy:

  • Overall performance is characterised by a globally competitive knowledge-based services on one side and a large agriculture component on the other.
  • Services have been driving growth and are today the major contributor to GDP growth (over 49%).
  • The current government has promoted liberalisation and regulation more open to FDI – see article on Insurance Act in 2015 – as well as the strengthening of the manufacturing sector (see the initiative Make in India)
  • Informal sector still accounts for 90% of total employment and the need to promote quality jobs is a concern.

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