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Scroll.in
31-07-2025
- Business
- Scroll.in
Why the Indian government has struggled to protect skilled overseas labourers in the Gulf
Most Indians migrate with dreams of a better future, wrote Irudaya Rajan, a highly regarded and longstanding researcher on labour migration. 'But far too often, they are seen only in a reductive manner, as people sending remittances to the home country.' Over the past three decades, ever since the World Trade Organization came into being and India began to focus on services trade, official policy on out-migration of labour has been shaped by the desire to earn foreign exchange and to find an employment outlet that eases the burden of population at home. Based in Kerala, home to millions of labour migrants to the Gulf, Irudaya Rajan has long complained both about the inadequate database on labour migration and the absence of adequate infrastructure to support migrant workers, despite their growing importance both to the Indian economy and the economies of the Gulf. West Asia has had an intimate economic and social link with the Indian subcontinent for centuries, especially with regions along the Indian west coast from Gujarat down to Kerala. Arab traders were regular visitors all along the western coastline and Gujarati and Malayalee merchants had extensive links into the Arab world. Following the 'oil shocks' of the 1970s, when crude oil prices shot up, an economic boom in the region ensued. The construction and consumption boom that followed created a huge demand for labour in the construction and services sectors. Muslims from the Malabar region of Kerala were the first to seize the opportunity, given their historic links with the Arab world, but thousands of semi-skilled and skilled workers went across the Arabian Sea from the 1970s onwards. My batchmate in the MPhil course (1976–78) at the Centre for Development Studies (CDS), Trivandrum, Raju Kurian, was among the first to study, as part of his MPhil dissertation, the emerging trend of rising migration from Kerala to the Gulf. The CDS has since become an important repository of research on Indian labour migration to the Gulf. Beginning with a few thousand labour migrants per year in the 1970s, the numbers rose sharply in the 1980s and 1990s to touch 3 million in 2000. By 2023, it was estimated that close to 9 million Indians were residents in the Gulf Cooperation Council (GCC) countries. This sustained and high level of labour migration from India to the Gulf was not regulated under any bilateral or multilateral framework. The Government of India enacted the Emigration Act 1983 to ensure oversight on the recruitment and passage of labour going overseas. Over time, some bilateral treaties have been signed, yet issues like conditions and terms of work, security of tenure, health and social security and related issues remain problem areas. Despite all this, and considerable publicity in the media on the travails of Gulf workers, hundreds of thousands continue to go there in search of jobs, given the relatively better incomes earned. Remittances home by migrants in the region have risen sharply with total inward remittances, including from workers in other countries, adding up to well over $100 billion. Researchers and activists have pointed to the need for changes to the 1983 Emigration Act aimed at enabling the government to better protect the rights of emigrant workers, especially in the non-democratic countries of the Gulf, where human rights protection is lacking. The Government of India's eMigrate Project is an online system that links the Protector General of Emigrants and Protector of Emigrants to Indian diplomatic missions and the relevant offices of the Ministry of External Affairs. It allows recruiting and insurance agencies, overseas employers, project-based labour exporters and workers opting to migrate to link into a single information network. All foreign employers are required to register with the eMigrate system and secure permission to recruit, declaring the terms and conditions of employment. As Rupa Chanda and Pralok Gupta note, the importance that successive Indian governments have been attaching to this labour outsourcing is testified to by the fact that the government has several offices in place to protect the interests of overseas workers. These include the Pravasi Kaushal Vikas Yojana, Overseas Workers Resources Centre, Migration Research Centre and the Pre-departure Orientation and Training programme. Despite such efforts, migrant labour, especially those located in the Gulf countries, continues to face various problems ranging from being cheated by recruiting agents, being denied full payment of dues, and inadequate housing and provision for medical emergencies and assistance. The Government of India has from time to time used the bilateral route to extend some degree of protection to migrant labour. While local politicians in states like Kerala are focused on the rights of migrant labour, little attention is paid by the national leadership unless there is some crisis or tragedy, as occurs from time to time in the Gulf countries. In a study of India's diaspora diplomacy in the Gulf, Levaillant observes how important diaspora labour welfare management had become for Indian diplomats and to Indian diplomacy in the region. Yet, the lack of adequate funding has impeded diplomatic effort, argues Levaillant. 'Added to this resource issue is the important fact that India's diplomacy in the Gulf rests on a paradox: although diplomats have made increasing efforts to promote Indian migrants' rights, their political priority is directed towards maintaining emigration flows.' Given the importance attached by the government both to sustaining dollar remittance in flows and securing employment opportunities for Indians in the region, officials and diplomats are unwilling to overstep their brief in defending the interests of labour. India presently has bilateral treaties with most GCC countries that ensure that immigrant labour is covered by the same labour laws that apply to local labour, but such protection is not always forthcoming and weakly enforced. They also specify conditions regarding qualifications, benefits, facilities and entitlements of workers, protection of repatriation of income and so on. These treaties provide for joint working groups that ensure their implementation and have become necessary in the absence of any regional or multilateral treaty extending such protection. Apart from Saudi Arabia, none of the other GCC member-countries has as yet agreed to sign up to the Mode 4 component of the General Agreement on Trade in Services (GATS). It is neither a bilateral agreement nor a multilateral treaty but the simple dynamics of Gulf sociology and demography that have created the demand for Indian labour. In many GCC countries, few among the local population are either trained to or willing to perform the tasks that South Asian labour has been willing to and capable of performing. Resource- and cash-rich GCC countries import labour from most South Asian countries as well as some South-east Asian ones to meet the demand generated by their wealth and prosperity. While Indian analysts and policymakers worry about the danger of this demand petering out over time, and its consequences for the home country that has been benefiting from inward remittances, the Gulf continues to attract immigrants from India. Not just workers and maids, nor drivers and office assistants, but the Indian wealthy, the so-called HNIs. Even as the Gulf demand for labour tapers off, new opportunities are opening up in a world where, for one reason or another, there are episodic labour shortages and India is a willing exporter of labour. As mentioned previously, countries as diverse as Israel and Taiwan have opened up to Indian labour. More recently, so have Greece and Italy. A premier business newspaper reported, after focusing on migration and mobility pacts, that the government is now exploring agreements with developed economies to send skilled workers in the construction, farm and manufacturing sectors, stating, 'These pacts would be along the lines of the deal signed with Israel earlier this year. Greece has approached India for sending up to 10,000 seasonal agricultural workers, while Italy has sought workers to staff municipal bodies in its emptying towns, people in the know said.' Apart from such legal migration, illegal migration is also on the rise. We mentioned the rising numbers of Indians, including from the developed state of Gujarat, entering the US illegally through the Mexican and Canadian borders. Many of the industrial economies of Europe are facing a shortage of manpower and are willing to liberalise their immigration policy to attract labour from developing countries. This source of demand is being driven by global demographics, with declining population growth in developed countries and India is emerging as home to the world's biggest and youngest population. Rising unemployment over the past decade has forced many young Indians to seek even high-risk jobs in countries at war.
Time of India
24-07-2025
- Business
- Time of India
CDS backs mobile phone PLI renewal citing 23% domestic value addition
ETtech Academy Empower your mind, elevate your skills Our BureauNew Delhi: The government should look at extending the production-linked incentive (PLI) scheme for mobile phone production to sustain the momentum of growing exports, even as domestic value addition , both direct and indirect, increased to 23% in 2022-23, amounting to $10 billion for mobile phone manufacturing, said a study conducted by the Centre for Development Studies (CDS).According to the report, released on Wednesday in collaboration with the India Cellular and Electronics Association (ICEA), mobile phone exports surged to $24.1 billion in 2024-25 from $0.2 billion in 2017-2018, marking an 11,950% increase. Exports now outpace domestic demand and are the primary driver of production total domestic value addition (DVA) was estimated using the Annual Survey of Industries' plant level data, commerce ministry's export-import data bank and industry estimates, the report said. The direct DVA increased to $4.6 billion in 2022-23 from $1.2 billion in 2018-19, a 283% increase. Indirect DVA rose much higher, to $3.3 billion in 2022-23 from $470 million in 2018-19, a 604% leap."The PLI scheme needs to continue as long as we are able to address some of the cost disabilities that the manufacturing sector is facing. Once we reach the stage where we can see that these inefficiencies are removed, we can stop," said C Veeramani, professor and director, Centre for Development Studies, Thiruvananthapuram. Government officials said the renewal of the mobile phone PLI scheme is still under discussion."We are discussing with the industry what their further requirement is and how to support them. The aim of the PLI scheme is to continue the drive towards self-reliance. This involves examining every item, every component which is used, including machines and materials, and all elements in the bill of materials to reduce dependence," said an official. The CDS study said India has transitioned to a growing trade surplus in mobile phones , driven by increasing exports. The study also addressed scepticism around the reported trade surplus in the sector due to its heavy reliance on imported components and low-margin assembly-led nature.
The Hindu
24-07-2025
- Business
- The Hindu
Phone assembly domestic value addition is 23%, new report claims
A new study by the Thiruvananthapuram-based Centre for Development Studies (CDS) asserts that the gains from India's mobile phone manufacturing are greater than skeptical analyses have previously assessed. Domestic value addition has already reached 23%, the report claims, compared to single digit estimates elsewhere. Specifically, the report does not agree with the notion that phone assembly is an area of 'trade surplus,' a point contended notably by RBI governor Raghuram Rajan, who said in a brief paper with a colleague, Rohit Lamba, that since India was still importing nearly all components that were being assembled in mobile phone manufacturing, the result was India remaining a net importer in effect. Mobile phone manufacturing — encouraged through Union government schemes like the Production Linked Incentive scheme — has been a much touted success story for Indian domestic electronics manufacturing, fueling hopes of similarly promising results elsewhere. ₹4.1 lakh crore of finished mobile phones were manufactured in India in 2024 according to an industry estimate. The number isn't necessarily indicative of phone assembly as a part of the economy as assembly is usually estimated to only account for 4% of a phone's selling price. The case against India running a phone trade surplus rests on a 'misleading assumption' that imports of the components that go into such assemblies are exclusively going into phones, and then getting shipped back out of the country, C. Veeramani, CDS's director said. 'We used data from the Annual Survey of Industries, and that shows that the actual use of imported components in the mobile phone sector is less than 25%.' Dr. Veeramani reported his findings to the press at an event by the India Cellular and Electronics Association (ICEA), a trade body representing electronics manufacturers; the CDS director's estimates of domestic value addition were even higher, he said, than the ICEA's: 'The Total DVA (direct + indirect) increased to 23%, amounting to more than $10 billion in 2022-23,' the report says. China factor A key recommendation in the report is to focus on scaling assembly operations in the medium term, rather than pressing firms immediately to procure components from local sources. 'We cannot have a robust [electronics manufacturing] strategy keeping China out, that will not work,' Dr. Veeramani said. 'China has to be part of the game and a mindset change is needed there.' If Chinese firms were invested in India, Dr. Veeramani said, they would have no incentive to block movement of capital goods and Chinese nationals to India, something that some phone and semiconductor makers are facing in recent months.
Time of India
23-07-2025
- Business
- Time of India
India emerges as a global mobile manufacturing powerhouse, says CDS study
New Delhi: A study by Centre for Development Studies (CDS) has quantifiably ascertained the progress of the Mobile Manufacturing sector in India, with India rapidly ascending to become the world's 3rd-largest mobile phone manufacturing-based exporter at $20.5 Billion (CY2024). This transformation, starting in 2017, is attributed to sustained government support, and strategic integration into global value chains (GVCs) with a sharp policy pivot towards exports with the launch of the Production Linked Incentive (PLI) Scheme in 2020, according to an official statement. The study, led by Professor C Veeramani, Director and RBI Chair professor, tracks India's extraordinary journey from an import-reliant mobile market in 2014- 15 to a global production and export hub in 2024-25. The study has found that mobile phone exports surged from just $0.2 Billion in 2017-18 to $24.1 Billion in 2024- 25, driven primarily by large-scale export production. "This staggering 11,950 per cent increase marks a structural shift in India's manufacturing orientation. Exports now outpace domestic demand and are the primary driver of production growth. The country has been recording a robust positive net export trend in mobile phones since 2018-19," the statement read. India's mobile phone production saw a significant rise in Domestic Value Addition (DVA), both directly and through supporting industries, suggesting a maturing ecosystem with stronger domestic participation, according to the study. "The Total DVA (direct + indirect) increased to 23 per cent, amounting to more than 10 Billion $in 2022-23. This was estimated using Annual Survey of Industries (ASI) plant level data, Ministry of Commerce export-import data bank, and industry estimates," the statement added. Direct DVA, according to the study, increased from $1.2 billion (2016-17 to 2018-19) to $4.6 billion (2019-20 to 2022-23) - a 283 per cent rise. Indirect DVA rose by a much higher percentage, from $470 million to $3.3 billion - a 604 per cent leap. Indirect DVA refers to the backward linkages of the mobile phone industry - that is, the value added by domestic suppliers of components and services used in production. According to ASI data, the total employment (combining direct and indirect) associated With mobile phone production has grown significantly to more than 17 lakhs in 2022-23. The analysis also revealed that Jobs linked to exporting of mobile phones surged by over 33 times. "The study also analysed wage growth in the sector. It reported notable wage increases, especially in export-linked roles - indicating a strong economic spillover into salaries and income levels," the statement read. While presenting the study, Veeramemphasised, "India's success mirrors the path taken by other Asian economies - achieving scale first, and deepening value addition over time. Exports at global scale is the foundation for long-term competitiveness, and continued government support in this space will remain critical over the next decade. With the mobile phone manufacturing providing a blueprint for growth, India can replicate similar strategies across the electronics sector to position the country as a global manufacturing leader." On the findings of the study, Pankaj Mohindroo, Chairman, India Cellular & Electronics Association (CEA), remarked, "This study reaffirms what ICEA has consistently advocated that strategic integration into global value chains is critical for scaling exports, enhancing domestic value addition, and creating jobs. The evidence clearly validates our position that India's participation in backward-linked GVCs has delivered substantial gains to the country." The report recommends that policymakers maintain an outward-oriented strategy and address structural issues. Key recommendations include liberalising trade policies, resolving tariff distortions, and focusing on scale over early-stage localisation mandates - all aimed at addressing India's cost disabilities. This would also require investments in logistics, FDI facilitation, and ecosystem development for sustaining this momentum.
New Indian Express
23-07-2025
- Business
- New Indian Express
India set to surpass Vietnam in mobile phone exports by end of 2025: CDS study
NEW DELHI: India will surpass Vietnam in mobile phone export volumes by the end of this year, according to a study by the Centre for Development Studies (CDS). The report highlights that China will continue to play a key role in India's electronics manufacturing growth, especially as a major supplier of crucial components. The study, led by Professor C Veeramani, Director and RBI Chair Professor at CDS, recommends that India adopt a Global Value Chain (GVC)-centric approach to become one of the world's top smartphone suppliers and boost domestic value addition up to 40%. GVCs function like global assembly lines, where different parts of a product are produced in different countries. Each contributes in the segment where it holds a comparative advantage—such as lower labor costs, specialized skills, access to raw materials, or advanced technology. China and Vietnam followed this model: they began with mobile assembly and gradually built a comprehensive ecosystem of component suppliers. The study argues that India should follow a similar path, moving away from trying to design, manufacture, and assemble products entirely within one country. 'India's success mirrors the path of other Asian economies—first achieving scale, and then deepening value addition. Export-led growth is the foundation for long-term competitiveness, and sustained government support will be essential over the next decade,' said Prof. Veeramani.
